Tips Before Filing For Bankruptcy
A person, a partnership, or a company that becomes deeply saturated with debts at some point in time and does not have the capability to pay for it are the ones who usually go to court to petition for bankruptcy.
But there are different types of bankruptcy that an entity can file. And it follows that filing a personal bankruptcy is different from filing a company bankruptcy. It is then important that you know a few things about bankruptcy before considering doing it.
What You Should Do Before Filing For Bankruptcy
- Get professional help.
There are a number of practicing bankruptcy attorneys that you can consult before you take the first step of filing bankruptcy with a US court. Some of them can be found online, so they are very reachable indeed. And don’t worry about fees. The bankruptcy process provides for the lawyer fees as well. So don’t attempt to file bankruptcy alone. It is always best to do it with the guidance a bankruptcy expert.
- Know the different types of bankruptcy.
Chapter 7 bankruptcy and chapter 13 bankruptcy are two of the most commonly used bankruptcy law. However, the two accommodates entirely different groups of people. Chapter 7 is for individuals, partnerships, or companies. Chapter 13, on the other hand, is for the self-employed and the single proprietors. And there are other types still. Determine the one that will be most beneficial to you as the debtor.
- Prioritize your debts.
Even if you file bankruptcy, you can’t be assured of full debt payment. There could be debts and payables that won’t be covered by the entire process. Payables that won’t be covered would be taxes, alimonies, and child maintenance fees, where they are applicable.
- Analyze your options.
With your lawyer, try to explore all the available option for you and your debts. Check if filing bankruptcy with your spouse is more beneficial than filing it under your name only.
- Evaluate your debts against your assets
While there are properties that are exempt from liquidation, there are certainly a lot that aren’t. If you file for bankruptcy, you will certainly lose some assets. It is then important that you be open with the bankruptcy court so that your assets will be handled well. Anything you do with relation to your bankruptcy case that appears devious to the bankruptcy judge will be taken against you.