There is plenty of information and guidance available online regarding how you should deal with the ongoing process and aftermath of bankruptcy. What do you do, however, before filing for bankruptcy? Bankruptcy is a big financial decision and if you’re not taking the right steps ahead of time, it could end up meaning a lot more trouble for you later on. Today, we’re looking at some of the things you should be doing before you file for bankruptcy.
Learn About Bankruptcy
The first step is simple- do your research. The know you more about the system of filing and going through with a bankruptcy, the more comfortable you will be when it comes to taking each step along the way.
After learning about what bankruptcy does and how it can help you, it is important to decide whether bankruptcy is best for you in particular. Make sure you talk to an attorney or do your own research regarding issues such as which debts bankruptcy can and cannot take care of, the costs of filing for bankruptcy, and any alternatives available to filing for bankruptcy.
Check and Monitor your Credit
While you should always know the status of your credit, it’s especially important to know where your credit stands in the face of filing for bankruptcy. You should be tracking your credit throughout your bankruptcy to see what happens, where it ends up, and how you can plan to get back on the right track to good credit.
Be warned: if you are using credit cards and building more credit in the face of filing for bankruptcy, you may run into complications regarding the authenticity of your bankruptcy. Recent use of credit or receipt of loans in close temporal proximity to the filing of your bankruptcy can be used as evidence of fraud, as it implies that you took out the loan with the intention of never paying it back. Additionally, it’s also a generally bad idea-
Know and Manage your Monthly Expenses
Whether you’re facing the possibility of bankruptcy or not, it is important to have a grasp on your spending habits. Make sure to keep track of how much money you’re spending every month and how much money you will need in the future. Setting a strict monthly budget for yourself and sticking to it may not only help you to avoid having to file for bankruptcy in the first place, but may make the bankruptcy process flow smoothly and more efficiently later on.
Many state programs offer financial counseling to those who are facing or considering bankruptcy. As of 2005, the state of Colorado requires that any individual filing for bankruptcy must take a pre-filing bankruptcy credit counseling course within the first 180 days of filing. Colorado offers several non-profit organizations that offer free or limited-charge financial counseling to families and individuals who are struggling with financial management and the bankruptcy. In some cases, credit counseling courses can serve as an alternative to going through with bankruptcy, as it will allow for your creditors to work with you to craft a payment plan that works for everyone.
Don’t Wait to Speak to an Experienced Bankruptcy Attorney
If you’re thinking of filing bankruptcy, curious about the bankruptcy process, or have questions as to whether bankruptcy is right for you, don’t hesitate to contact an attorney that specializes in bankruptcy. A bankruptcy attorney will be able to give you the information you need so you can feel comfortable knowing that you’re making the right decisions. If you wait too long to meet with an attorney, you risk making decisions that may have detrimental effects later on in the bankruptcy process.
At Berumen, we’re proud to have some of the best bankruptcy attorneys in Colorado. If you’re thinking about filing for bankruptcy and want to make sure you’re taking the right steps right from the beginning, contact our Colorado bankruptcy specialists today.
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