Are your unpaid bills piling? Are you getting an overdraft after another? Do you get calls from your creditors? This can cause lots of stress anxiety or even worse. Filing for bankruptcy is a legal process that can help overwhelmed folks find answers to their debt issues. However, Presented here are the things that you should know before filing for bankruptcy.
Know Your Debt
Before you determine whether you should file for bankruptcy or not you should know how much debt you owe. In most cases, people avoid reviewing their credit card statements and end up owing a lesser amount than they imagined. Those with debt find much relief after declaring they are bankrupt. However, it’s not the ideal solution in most cases. Knowing the exact amount of your debt is a vital decision in making a sound judgment.
Check Your Income
Collect your paystubs, benefits, and documentation from whatever source of income you get. Reviewing this information will help you to determine your total monthly income. If you know the amount of money, you earn every month you can quickly decide whether to file for bankruptcy or not.
Don’t Transfer Assets
You don’t have to raise a red flag by changing the ownership of some assets or property just before filing for bankruptcy. The transfers may be seen as an attempt to hide some of your assets. If you are found guilty of trying to reduce your assets your right to discharge will be taken away.
Note Your Expenses
How much money do you spend every night? You should make a list of what you spend your money on like mortgage or rent payment, repairs, insurance, personal grooming, gas, entertainment to mention a few to find out how much money you are spending and where you are spending it.
Sidestep Credit Cards
You should avoid using credit cards if you are thinking about filing for bankruptcy. When you spend using credit cards when you are almost filing for bankruptcy the chances are that you won’t manage to repay the money that you are consuming. When you continue spending cash on your credit cards yet you are unable to pay you will end up complicating your case.
Avoid Touching Your Retirement Savings
When settling your debts, you should try as much as possible to avoid withdrawing funds from your savings account when you run out of cash. Its worth noting that your retirement funds are protected by bankruptcy laws and should never be used to repay debts. Before you think of withdrawing funds from your account, you should be aware of all the pros and cons involved otherwise you might break the law.
Seek Legal Advice
It’s difficult to accept that you require some assistance. Some folks ignore their finances for a long time, and they end up losing their homes or allowing the stress that comes with debt to ruin their marriage. It can be uncomfortable to speak with an attorney about your finances however it can help you to plan and save your assets.