If you are contemplating filing for bankruptcy relief, you need not be afraid of the bankruptcy process. However, the filing of a bankruptcy should not be perceived as being “easy.” In short, serious problems may arise if you do not approach the process with due care and respect. There are some things that you want to avoid which could make the process a lot more complicated than it needs to be. Conversely, there are things that you can do that could make the process a lot more simple and uncomplicated.
TOP 10 BANKRUPTCY DON’TS
1. Don’t transfer or give any of your property to friends or relatives.
2. Don’t “pay off” any debt to any friend or relative thinking that you then will not have to include that person in your bankruptcy.
3. Don’t pay off friends’ or relatives’ debts for them.
4. Don’t sell any of your property for less than its fair market value.
5. Don’t invest any of your limited time, energy and resources with any so-called “debt settlement companies” who will only take your money and make false promises about being able to “settle” with your creditors.
6. Don’t incur new debt on your credit cards and do not use them to gamble at casinos or otherwise.
7. Don’t rely on or put faith in much of your own research that you may have done on the internet because a lot of the information is just flat wrong, even from the sites of attorneys who claim to be “experienced.”
8. Don’t believe the threats and fear-mongering collection agents and creditors may be giving you because they can’t do what they may be threatening at all or for a very long time.
9. Don’t cash in life insurance policies or 401k plans to pay off or pay down creditors.
10. Don’t use one credit card to pay off another or to pay your taxes.
TOP 10 BANKRUPTCY DOS
1. Do retain a qualified and truly experienced bankruptcy professional and thoroughly investigate anyone whom you are considering hiring because there are a lot of attorneys who are actually very new to the practice of bankruptcy law but who purposefully misrepresent themselves as “experienced” or “highly qualified.”
2. Do make sure that all of your state and federal tax returns have been filed.
3. Do disclose ALL of your property for your attorney and expect your attorney to explain why you need to disclose ALL of your property and how you are to disclose it in your bankruptcy petition and related schedules.
4. Do understand that bankruptcy is nothing to be afraid of but that it merits a very healthy respect because the bankruptcy petition and related schedules that you complete with your attorney are not just “forms”; rather, they are legal pleadings that you and only you sign subject to penalty of perjury.
5. Do expect your attorney to be knowledgeable about the bankruptcy process, to be able to thoroughly explain the bankruptcy process to you, to timely answer all of your questions, to return your telephone calls and to get you through the bankruptcy process with as little disruption to your life as possible.
6. Do disclose ALL of your creditors, including student loans, friends and relatives, criminal fines, overdraft fees, medical bills, tax debts, child support debts, past due utility bills and ALL other creditors and all other parties who MAY have any legal claims against you, such as via a motor vehicle accident or damage to property.
7. Do maintain documentation concerning your debts and assets including, but not limited to, billing statements, state and federal tax returns, mortgages and vehicle purchase agreements, title certificates for your vehicles, boats, ATV’s, etc., deeds and property tax statements concerning land in which you may have an ownership or possessory interest, 401k statements, life insurance policies, savings bonds, homeowners insurance policies, divorce decrees, and jewelry appraisals.
8. Do understand that bankruptcy DOES nullify or discharge your legal and contractual obligations to pay most of your creditors’ claims but that it DOES NOT necessarily make your debts go away or disappear and that some claims, such as criminal fines, survive bankruptcy.
9. Do accept the reality that sometimes people can and do lose property in bankruptcy but that this is the exception rather than the rule. Sometimes the loss of property is unavoidable and one must accept that but keep in mind that a truly competent bankruptcy professional can minimize such a consequence and can even, sometimes, prevent it from happening.
10. Do consult with parents or friends or relatives (you do not have to tell them why) about whether they have listed you in a will or put your name on their land or on any of their bank accounts.
Keep in mind that you WILL get bankruptcy relief as long as you follow the road map which is the bankruptcy code. Your case will be approved as long as you are honest and forthright in your bankruptcy petition and related schedules. The key to a successful bankruptcy proceeding is to disclose, disclose, disclose in your bankruptcy petition and related schedules and to testify truthfully at your bankruptcy hearing. Know that bankruptcy may not be right for everyone. Sometimes, the best option is not to file a bankruptcy at all. However, hiring a competent and qualified bankruptcy professional will make all the difference. Any truly skilled professional will help determine whether the bankruptcy process could be either a benefit to you or a nightmare.
