Filing for bankruptcy protection can be a very big decision and it is one that should not be made lightly. Bankruptcy is a very effective — but still very aggressive — way to handle unmanageable debt and it will have a long-term impact on your financial goals.
However, if you have considered all your options and have decided that discharging your debts through Chapter 7 bankruptcy is the best route for you, it is crucial that you are prepared and know what to expect. For example, filing for bankruptcy isn’t just about filling out a form and watching your debts disappear. There are several things that need to be prepared and discussed before or at the time you file for bankruptcy.
In addition to filing a petition with the appropriate courts, you will also need to have prepared a list of all your debts, all your expenses, all the properties and assets you own and all sources of income. This information needs to be accurate and thorough; otherwise the court could deny your petition.
You will also need to submit verification that you have completed credit counseling and any repayment or budget plans that were developed through counseling. There are also several fees that need to be paid at the time you file, which can be a source of anxiety for people who are already struggling with debt. These tasks require some planning ahead and will need to be considered and handled before the bankruptcy process can proceed.
These documents, plans and tasks need to be addressed before you even get to the part of the process when you discuss your debt with creditors and a trustee to propose a plan. If any of these items are not completed properly, it can delay the process significantly and only add to the financial strain you are dealing with.
Being prepared can be enormously important when it involves a big decision like filing for Chapter 7 bankruptcy. Without adequate preparation, you can be caught off guard and make some costly missteps that can negatively impact your situation. Rather than try to figure this all out on your own, it can be a wise decision to consult an attorney who can explain the process and help you anticipate the challenges ahead.