Filing Bankruptcy?
What To Expect

The unexpected happens sometimes, whether a job is lost or an illness occurs. These can result in expenses becoming overwhelming, and before you know it you're deeper in debt than you ever imagined.

If you've always put 10% of each paycheck in a savings account, you probably have money to borrow from, but if you're like most people, you don't have that savings account, or anything other than credit cards, to rely on. Those credit cards will eventually max out, leaving you over-extended.

If you're drowning in debt, you may want to consider filing for bankruptcy. Read on for what to expect when you file for bankruptcy.

Is It Right For You?

First, you'll need to ask yourself if the filing is the right option for you. If you have income coming in and are able to consolidate your debt or work with your creditors to lower your payments or your interest, try that first.

If your creditors aren't willing to work with you, you are having your wages garnished, or you don't have any income coming in at all (with no outlook for income in the near future), bankruptcy may be a better option.

How To File

Filing for bankruptcy will require you to list all of your debts, along with creditor names, addresses and the amount owed for everything. This may require you to do some homework, even pulling a credit report for help finding out everything you owe.

You will also need personal information such as household income, tax returns, and other personal information. This information is compiled by your attorney and filed with the bankruptcy trustee.

After You File

After the bankruptcy is filed, you may then tell your creditors you are filing for bankruptcy. Your creditors should cease calling or contacting you after they receive a notice telling them you are in bankruptcy, which should be sent out after the filing occurs. Any garnishments should also cease after the bankruptcy filing.

At this point, you will also have to stop using credit cards that are included in the bankruptcy. Other assets (such as vehicles or watercrafts) may also need to be handed over in an attempt to settle debts at this time.

During Bankruptcy

During your bankruptcy, you may be required to make payments as directed by the bankruptcy court, submit all information as requested, keep the trustee informed of any changes such as employment or address, and attend credit counseling sessions if required.

Be sure to do everything that is required by the bankruptcy court or your trustee, as these things will need to be completed before your bankruptcy can be discharged.

After Discharge

If your bankruptcy was discharged, this means you are relieved of your debt and are no longer responsible for paying those debts back. This is the time to get your finances back on track and start rebuilding your credit. It isn't the time to spend on things you don't necessarily need.

Open a savings account and start putting money into it, so you don't end up in the same situation again. Open one credit card (even if it has a high-interest rate), use it on something small and immediately pay it off. By making purchases and paying the credit card off, you will help to rebuild your credit.

You may feel embarrassed to file bankruptcy, but the only people that will know about your bankruptcy is you, your attorney, the trustee and your creditors. A lot of people file for bankruptcy for all different reasons. Things happen and filing for bankruptcy is the responsible thing to do.

If you are in drowning in debt and aren't able to get out of it, call Brace W. Luquire for an appointment today to discuss filing for bankruptcy.