To get the most out of your bankruptcy you should work with your attorney to come up with a plan that will protect your assets while also providing a high level of debt relief. Below are some of the most beneficial things you can do before filing bankruptcy to help you get a fresh financial start.
Pay For Essentials
Before filing bankruptcy, you should try to pay any delinquencies you have on essentials such as your rent and utilities. Even if you’re able to discharge back rent you owe your landlord, you may still lose your housing because the landlord is not required to let you stay there if you haven’t paid your rent. If you have the cash, it’s best to pay your rent so that you can secure your housing situation. The same advice applies to utilities. Avoid high deposit requirements by paying off delinquent utility bills before you file bankruptcy.
Stop Using Your Credit Cards
Many who are strapped for cash use their credit cards to buy food. But once you decide to file for bankruptcy, you should immediately stop using your credit cards because creating more debt when you have no intention of repaying it is considered fraud.
Switch Bank Accounts
If you owe money to a lender with whom you also have a savings or checking account, you should seriously consider moving your money to another account. While creditors are not allowed to ask you for payment once your file bankruptcy, they can offset your bank account to pay down what you owe. For example, if you have an auto loan with Bank A for $10,000 and a checking account with them also, once you file bankruptcy, subject to court approval, they may seize the money in the checking account you have with them.
Stop All Automated Payments
Once you file bankruptcy, creditors are required to immediately stop taking payments from you. However, when you have an automated payment account setup, those payments may not stop immediately. By stopping your automated payments before you file bankruptcy, you can potentially save yourself hundreds of dollars and avoid the headache associated with getting your money back after creditors have illegally taken automated payments after your bankruptcy filing.
“Once you file bankruptcy, creditors are required to immediately stop taking payments from you.”
File All Tax Returns
For those struggling to make it, the task of filing taxes often falls to the bottom of the to-do list. Before filing your bankruptcy, make sure you’ve filed all required tax returns. Your bankruptcy case will be determined by your income and assets, and your tax returns may be used when assessing that information. By filing all tax returns before filing bankruptcy you’ll help your bankruptcy process go a lot smoother.
To get the most out of your bankruptcy make sure your plan in advance.