Before filing for bankruptcy, certain steps can be taken in advance to make the process go much smoother. No matter what financial situation a filer may be in prior to pursuing bankruptcy, it always helps to come up with a plan to protect his or her assets and make sure that the filer receives the highest level of debt relief possible. This planning can be done individually by the filer, but it is often best to sit down with a bankruptcy attorney to receive proper advice on what to do.
Stop Using Credit Cards.
One of the main reasons why many people end up filing for bankruptcy is due to credit card debt or other debt to pay for daily expenses. As soon as someone decides to file for bankruptcy, it is always recommended that he or she immediately ceases using their credit cards. Bankruptcy courts will view creating more debt when the person knows that it will never be repaid as a form of bankruptcy fraud.
Pay for Basic Essentials.
Many filers also find themselves behind on the most basic bills prior to filing, including rent and utilities. With respect to rent, while back rent may be dischargeable, landlords are not required to allow tenants who have not paid rent stay in their rental. If possible, it is advisable to pay late bills on these essentials prior to filing. Focus on your most basic needs, such as food, utilities and shelter, and make sure those are covered. first.
Stop Automatic Payments.
If the filer has automatic payments for credit cards or other bills, it may be best to stop these prior to filing for bankruptcy. While the automatic stay does go into effect as soon as the bankruptcy case is filed, this does not mean that all automatic payments cease. Stopping them must be done manually by the accountholder. Taking this step can save the accountholder thousands of dollars.
Change Necessary Bank Accounts.
Occasionally, a person will owe money to a lender or financial institution they also have a bank account with. If that is the case, someone who is considering filing for bankruptcy should consider moving that money to another account. Many times, creditors will have the ability to take money owed directly from the account if they are connected, and by doing this, the filer is protecting himself or herself from this possibility.
While filing taxes may be the last thing on a filer’s mind, having a tax return with accurate income is extremely important. Bankruptcy courts will determine the case based on the filer’s income and assets, and an accurate return will be key in establishing this figure. It will certainly make the process go smoother.
If you have questions on this topic or are in financial crisis and considering filing for bankruptcy, contact an experienced Miami bankruptcy attorney who can advise you of all of your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade Garcia McMaken has been helping people from all walks of life build a better tomorrow. Our attorneys’ help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade Garcia McMaken website at www.miamibankruptcy.com.