Chat with us, powered by LiveChat
Home / Finance / Tips to Prepare Yourself Before Filing Bankruptcy

Tips to Prepare Yourself Before Filing Bankruptcy

Bankruptcy is a status in which an entity or a person can’t repay his debts. In several states, bankruptcy filer needs court orders, and debtors initiate it. Laws of bankruptcy don’t necessitate you to hire an attorney to file for insolvency. You can hire an attorney for your assistance in this procedure.

Image result for Bankruptcy

People often wonder if they need a petition preparer for bankruptcy or a bankruptcy attorney. Keep it in mind that a bankruptcy attorney can handle your case in a better way and provide you with good advice. A petition preparer of bankruptcy can work as a typing service and need your strict directions to prepare a bankruptcy form.

Services of a Bankruptcy Lawyer

Los Angeles Bankruptcy Attorney is experienced to handle these cases regularly. They are specialized in this area and have a license to of state bar to practice this law. A bankruptcy lawyer can responsibly guide you through the whole bankruptcy procedure. He will do the following things:

  • Give you advice on bankruptcy in your best interest
  • He will explain the type of your case to file (chapter 7 and chapter 13 bankruptcy)
  • Prepare bankruptcy paperwork for you and file your bankruptcy case
  • Represent you during bankruptcy hearings (conference of creditors)
  • Offer you the legal advice during the entire procedure

Services of Bankruptcy Petition Preparers

The bankruptcy petition preparers are non-attorney services for typing. Generally, several petition preparers can access software program for bankruptcy that provides them to efficiently prepare and generate the important forms of bankruptcy under your guidance and directions. Nowadays, you can access printable and fillable bankruptcy forms (official) from the site of the US courts.

Causes to Hire a Bankruptcy Lawyer

A bankruptcy lawyer can handle legal aspects of a case from beginning to end. It means that you have to answer the questions of your attorney truthfully and provide documentation and information he/she needs. Your attorney can advise you as per your specific requirements. There is no problem in hiring a bankruptcy attorney.

The fee of bankruptcy attorney may depend on different factors, such as the type of bankruptcy and complications in your case. You may have to pay between $500 and $3,500 for Chapter 7. The fee for Chapter 17 is $2,500 – $6,000.

Prepare Yourself for Filing Bankruptcy

Before filing bankruptcy either a Chapter 7 or Chapter 13 case, you have to address some common issues:

Discuss Your Case with a Qualified Attorney

Before filing a bankruptcy case, you have to talk to an experienced attorney, such as the Los Angeles Bankruptcy Attorney. He will guide you and share important information with you. Choosing a qualified and reputed lawyer is essential. You can check his experience in similar cases.

People often contact their attorney late. If you are served with complaints and summons, you have to talk to your bankruptcy attorney immediately. If you have unpaid taxes ad FTB or IRS has indicated that you will garnish your salaries, you have to contact a bankruptcy attorney.

Evaluate Monthly Expenditures

Bankruptcy petitions of consumers comprise Schedule J. This schedule is an estimate of projected or average monthly expenditure for your family before filing a bankruptcy case. Before scheduling, consult an attorney and explain the whole situation. You can review your account statements to get an idea of your money. It may help you to determine if you have disposable income for creditors.

File All Tax Returns

You have to follow the BAPCPA (Bankruptcy Abuse Prevention & Consumer Protection Act). It will provide you with guidelines for filing bankruptcy and tax returns. You have to provide tax returns of previous or current years while filing for bankruptcy. If you are unsuccessful to file a return (become due after filing your bankruptcy), the IRS may require dismissal of your case. The 1308 section of bankruptcy needs filers of Chapter 13 cases to file their tax returns for previous four years before filing a petition for bankruptcy.

1099 Income or Document and Revie Self-employment

If you receive income 1099 or a self-employed person, it is important to understand your income and expenditure for almost six months before filing for your bankruptcy. You have to test an average income of six months to find out disposable monthly income for creditors. The procedure can be time-consuming, but necessary to file a bankruptcy.

Save Income Proof or Pay Stub Each Month

You can’t take advance before filing bankruptcy because it can increase problems in your life. Sometimes, it depends on the circumstances. For instance, if you have almost $5,000 cash advance on your credit card 2 to 3 weeks before filing your bankruptcy, you will hear from your credit card organization. It may result in an alleged fraud.

Stop the Use of Credit Cards

Use of credit card after filing bankruptcy can increase complications in your life. You have to stop the use of credit card before filing for bankruptcy. The recent use of credit card will be regarded as that you don’t want to repay this debt. Why are you increasing your debt when you are unable to pay your current due bills? If you can’t make payments to creditors, don’t use credit cards. If you are regularly missing payments of credit cards, you should stop increasing your debt.

Don’t Transfer Assets or Money to Family Members or Friends

You can’t even transfer a car to a family member or friend before filing bankruptcy. It will decrease your assets, and you are not allowed for it. This transfer will be disclosed and increase complications in your case.

The main purpose of bankruptcy filing is to discharge your eligible debts successfully. Transferrin money or assets will be regarded as an attempt to conceal your assets. It will only increase complications in your case.

Avoid Borrowing or Taking Early Withdrawal from 401(k) Plan or Retirement Plan

Bankruptcy offers exemptions for the protection of assets like retirement funds. People often meet their attorney after borrowing or withdrawing money from their retirement accounts to decrease their financial liability.

It is essential to evaluate all positive and negative outcomes of borrowing or withdrawing against a retirement plan. Bankruptcy offers exemptions that may protect retirement funds of an average person. You can keep your retirement even after filing your bankruptcy.

Disclose Your Assets, Expenses, and Income

If you want to file for insolvency protection, you have to disclose your assets, expenses, and income in your petition. The backbone of insolvency is an automatic stay, but the regulated body treats creditors as per their type of debt and priority of debt payment. They follow the code of bankruptcy to do all this.

Without disclosing your true information, it is not possible to fairly treat all creditors. The bankruptcy court or the trustee is not liable to find your assets. Bankruptcy filer must honestly disclose his/her income, assets and expenses in exchange of discharge of their debts. If you don’t disclose everything, you can lose your rights to discharge your debts. Moreover, you have to pay file and face criminal charges.

Types of Bankruptcy

Bankruptcy is of two types, such as the payment plan and discharge of debts. Chapter 7 is a code of bankruptcy to discharge debts.

Chapter 7

Under this code, you have to pay the debt or give up your belongings for secured loans. You surrender a nonexempt property to pay off your debt (as much as possible). You can keep exempt properties and get freedom from your obligations to repay remaining dischargeable debt forever.

To file Chapter 7 bankruptcy, it is important to prove that you don’t have enough income to pay almost one portion of debts. This determination needs a particular mathematical calculation. A form is available to make calculations. If your income is sufficient, you have to file bankruptcy under another Chapter 13.

Chapter 13

In this chapter, you can’t avoid your debts completely, but you can choose one or both options, such as:

  • Get rid of a section of debt to manage payments easily
  • Streamline your payments to make them manageable, as per your income

You can do this by spreading payments for a longer duration or make payment of a section of the loan. You can decrease your weekly or monthly payments. This type of plan may last for five years. During this time, a trustee will monitor your finances.

The judge and trust consider two things while deciding on your plan:

  • Whether the creditors are fairly treated
  • Whiter every creditor can receive at least a particular amount equal as per chapter 7 of bankruptcy.

In 13 Chapter, creditors meet to reach an acceptable plan. You can negotiate with creditors because they try to change your payment plan so that they can get money at a faster rate. Agreement of creditors is not necessary for your plan, but if they can agree, the judge and trustee can easily accept your plan.

If you are looking for a reliable bankruptcy attorney for in Lose Angeles, see this place:

Address:

“Los Angeles Bankruptcy Attorney

554 S. San Vicente Blvd

Suite 160-F

Los Angeles, CA 90048

424-285-5525

https://www.losangeles-bankruptcyattorney.com

About Rohit Shetty

Check Also

4 Factors You Must Consider Before Purchasing Car Insurance

Anyone who owns a car knows the importance of car insurance. Your car insurance protects …