Before You File for Bankruptcy

Learn what bankruptcy can do for you and how to begin the process.

Deciding to file for Chapter 7 bankruptcy can be difficult. Many people take months or years to accept that a bankruptcy filing may be their only way to climb out of debt. Before you file your bankruptcy case, there are several things you should consider.

It’s essential to do your research before you file for bankruptcy. Having a lot of credit card debt doesn’t automatically mean bankruptcy is the answer. Regardless of the type you file, bankruptcy will wreak havoc on your credit score. If the bankruptcy court forces you to file a Chapter 13 bankruptcy, you must commit to a long-term repayment plan.

Here, we’ll discuss some things you must consider before starting the bankruptcy process, including:

• Whether your financial situation warrants bankruptcy
• Bankruptcy advantages and disadvantages

In this section, you’ll find resources and answers to common questions about what bankruptcy can do for you and what you need to begin the process toward a better financial future. If you have questions about your bankruptcy filing, contact an experienced bankruptcy lawyer.

Click on the links below to learn more:

Sample Forms

Filing bankruptcy involves a lot of paperwork. Even if a bankruptcy attorney is helping you, you’ll be responsible for completing many bankruptcy forms. FindLaw’s Bankruptcy Checklists and Sample Forms can help ensure that your bankruptcy discharge includes all your debts.

Some of these debts include:

• Unsecured debts, such as medical bills and credit cards
• Overdrafts on your bank accounts
• Personal loans
• Mortgage and other secured debts

The automatic stay will help make sure that there’s an orderly liquidation of your debts. It can also keep at bay creditors with debts not discharged in your bankruptcy. This often includes debts like student loans, tax liens, and past-due child support. If need be, you can send the stay to your creditors prior to filing cease and desist letters and notice of the bankruptcy filing after it takes place. These communications can warn them not to contact you until the bankruptcy proceedings are over.

Avoiding Scam Companies and Credit Counseling Agencies

You need to be careful if you take this route. Many companies prey on people with financial problems.

Some companies try to take advantage of people experiencing financial distress. For example, banks may offer secured credit cards with extremely high interest rates. Be wary of these offers. You may find yourself in worse shape than before dealing with these companies. Luckily, there are ways to spot and avoid credit repair and credit counseling scams.

Working With a Lawyer

No law dictates that you hire a bankruptcy attorney to handle your case. You can file a bankruptcy petition on your own, although it’s a complex process. If you want to avoid having lenders take advantage of you, consulting with a skilled attorney is a good idea.

A bankruptcy attorney can guide you through the process and answer any questions you may have. Such questions might include the following:

• Which type of bankruptcy should you file, whether a Chapter 7 bankruptcy or a Chapter 13 bankruptcy?
• How will a filing affect your credit score?
• What happens when you file for bankruptcy?
• Can bankruptcy affect your job prospects?
• Can bankruptcy clear lawsuit judgments?
• Can bankruptcy stop wage garnishment?
• Can you clear medical debt in bankruptcy?
• Can you file for bankruptcy while unemployed?

The last thing you want to do is complete the bankruptcy process only to learn that you didn’t include all your dischargeable debts. Nor do you want to learn that a U.S. bankruptcy court or bankruptcy trustee is seizing your nonexempt assets.

For example, if you’re still paying a car loan, the bank may seek repossession of your vehicle. The same is true for other nonexempt property tied to a nondischargeable debt.

Gathering all the necessary documents before meeting with your attorney can help avoid these issues.

What if You Want To Retain a Skilled Bankruptcy Lawyer?

If you aren’t sure about bankruptcy or where to start, talk to a bankruptcy attorney to better understand your next steps.

You can find an experienced local bankruptcy lawyer through our attorney directory. Some of these attorneys offer free consultations. Some may offer a fee for an initial consultation, which is discounted from that attorney’s retainer if you retain them to file for you.