If you’re faced with huge amounts of debt, you have some tough financial decisions ahead of you. Although filing for bankruptcy may be your last ditch effort to help get yourself out of debt, the following 7 steps can help simplify the process and make it easy for you to follow.
Do Your Homework
Many of today’s millennials are opting to live the life of a minimalist. It’s not because they are looking to deprive themselves of material things. Minimalism just means to surround yourself with only the necessities in life. Unfortunately, there are others who live for their belongings such as luxury cars, fancy homes and toys. But living well beyond your means can put you in financial distress. Filing for bankruptcy is a huge decision, and you need to do your homework before going forward. Learn about the pros and cons related to the filing to determine if it’s your best option. Although your friends and family may have helpful tips, only rely on those who are certified experts for bankruptcy advice.
Enlist the Help of an Attorney
Once you’ve decided that filing for bankruptcy is your best option, you want to enlist the help of a bankruptcy attorney. They will be able to determine what type of bankruptcy you are qualified for, and the paperwork that needs to be filed. During the consultation, the attorney will need to see pertinent information such as income, monthly expenses and size of your household.
Review the Paperwork
When you’ve made the decision to go through with a bankruptcy filing, your attorney will prepare the proper documentation. They’ll take into consideration your tax returns, home appraisal, paystubs and credit reports to prepare the petition. You’ll need to review the documentation to ensure that your name, address and all other personal information is accurate. All of your debts should also be listed. If a bill or financial document is not included, it could cost you additional money later on to add the items.
Obtaining Credit Counseling
Before you can file for bankruptcy, an approved credit counselor will assess your financial situation and determine if bankruptcy is the best option. Whether done via phone, online or in person, the question and answer course needs to be completed by a specific time or they’ll dismiss your case. Once completed, your attorney will file your bankruptcy petition. At this time, the automatic stays are assigned to protect you from any creditors seeking money for your debts.
Complete Additional Briefings
There are other counseling meetings that need to go on once your bankruptcy case has been filed. Courses are offered to help you manage your finances once your bankruptcy has been dismissed. Depending on what type of bankruptcy you are qualified for, the briefings are mandatory and must be completed within a required number of days. The 341 meeting is typically held within 30 to 40 days of filing, and your bankruptcy attorney will assist you to ensure all documents have been tendered.
Dependent on the type of filing, your discharge may be completed within 2 or 3 months of the 341 briefing. Your creditors are now prevented from collecting on any debit that was eliminated in the bankruptcy process.
Focus on Rebuilding Credit
After your bankruptcy has culminated, it’s time to focus on rebuilding your credit. You can do this by regularly checking your credit report for inaccuracies. If you choose to reaffirm your car or house, you’ll want to make sure you pay your loans on time. Debt counseling can help you put together a budget, but you need to adhere to it.
Deciding to file for bankruptcy is a major decision that shouldn’t be taken lightly. With the help of a knowledgeable expert, and the above steps, you’ll be able to make a fresh start and gain your future financial independence.