What to Expect

Bankruptcy has many benefits. You can start fresh with your financial life and can wash away the stress of dealing with creditors and overwhelming bills. Even though the thought of bankruptcy can sometimes seem scary, working with a knowledgeable attorney yields the best outcome.

Here’s a look at what you can expect before, during and after the filing process:

There are several things that you should do if you plan to or think you may have to file bankruptcy in the future.

  • Gifts
    • Do not give away anything you own or sell it for less than fair market value within one year of filing. This could appear that you are hiding assets from creditors and may constitute fraud. The transaction could even be nullified and the property sold for the benefit of creditors.
  • Payments to Creditors
    • Do not pay more than $600 (over and above the regular monthly payment) to any creditor within three months of filing bankruptcy. Again, the bankruptcy trustee could demand it back from that creditor, causing trouble for the creditor as well as yourself.
  • Debts to Family Members
    • Many of us have received loans from family members, especially when we are in hard times. Do not repay family members that you owe within one year of filing bankruptcy. This could be considered a "preferential transfer" to an insider. Even though you owe the money and feel you are doing the right thing, it may be improper when declaring bankruptcy. The bankruptcy trustee could demand the money back from your family member and pay it to your creditors.
  • Get Your Documentation Together
    • You will need the following items in order to file bankruptcy:
      • Last two years of tax returns
      • Last six months of paycheck stubs for you and your spouse
      • Copies of any lawsuits filed against you
      • A recent credit report or list of creditors with bills owed

 Here’s what to expect during the filing process:

  • Any garnishments and creditor calls will immediately stop. Your unsecured debt, such as credit cards and personal loans, will not accrue interest after you have filed bankruptcy.
  • A bankruptcy court will review your documentation and situation and make a decision whether to grant you the bankruptcy or suggest an alternative. This process may include some uncomfortable scrutiny of past records and statements, and you may need to answer for any unusual transactions.
  • I will help you each step of the way to make sure you’re comfortable and confident with your decision to file bankruptcy. I will outline all of your options, and what each one means for you.

It’s OK – there is life after filing bankruptcy:

  • After you file bankruptcy, your credit can begin to rebuild in just a couple of years. Paying your utilities, car payments and even cell phone bills on time will help to bring your credit back to good standing.
  • Your debt-to-income ratio will drop drastically, meaning that you may receive calls and offers from credit card companies and other lenders. It is up to you whether or not to pursue these offers, and as long as you can pay them on time, they may help rebuild your credit. Be wary of exorbitant interest rates and predatory lending practices.
  • You may even be able to purchase a car, get a personal loan and keep your home after filing bankruptcy.