When your negotiations with creditors have failed, repossession is imminent, and the foreclosure proceedings have already begun, you will feel at your lowest point in life. Your income, in this situation, may not be enough to cover your medical bills no matter how small they may be. When you have reached such a point in life, it is time for you to consider filing for bankruptcy. Since bankruptcy laws have evolved, you have to be more careful when filing for it. Here are some of the things that you need to do before you file for bankruptcy.
When filing for bankruptcy, it is important that you disclose your expenses, assets, and income in the petition. When you disclose your income, you are in a good position for a debt discharge. It shows that you are honest and you will be allowed to proceed with making payments for debts that have the highest priority. If you fail to disclose everything, not only will you lose the right to a discharge of your debts, but you may pave the way for criminal charges to be filed and fines imposed.
When repaying debts, do not withdraw funds from your retirement account when you have run out of cash. Bankruptcy laws provide exemptions to protect your assets including retirement funds so you shouldn’t withdraw your retirement benefits to pay for debts just to stay afloat. Weigh all the negatives and positives of using up these funds before you withdraw anything. If you are in a position where you cannot repay debt, just file for bankruptcy and channel your retirement benefits to be used for your personal needs.
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The aim of bankruptcy is to discharge your debts hence you shouldn’t raise a red flag by transferring ownership of your assets to family members. When you file for bankruptcy such transfers will be examined and even transferring a car to a family member will be considered as an attempt to reduce your assets. When it is determined that you are trying to reduce your assets to cheat your way in bankruptcy law, your right to a discharge will be taken away.
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Don’t use credit cards close to the time you are filing for bankruptcy. Spending using credit cards at this moment when you are filing for bankruptcy is a clear indication that you will not be able to repay for the amount you are spending. If you are not able to repay creditors and you’re still using credit cards, it shows that you are intentionally spending your creditors cash and this might lead to complications in your case. When you do the things mentioned above, you will be in a good position to file for bankruptcy successfully. While bankruptcy might seem a low point in life, you can use it as a positive thing to regroup your finances and improve your financial position.