Experiencing financial distress isn’t something anyone would ever wish upon themselves. However, times are always unpredictable, and you may have to consider doing whatever you can to help ease off that weight and pressure from your shoulders. One of these ways is to take the court approach of filing for bankruptcy.
This video goes into full detail about what that means for most people:
There are many things an individual can do to have a smooth, stress-free bankruptcy experience. At the end of the day, it should give both debtors and creditors a fresh start after avoiding a potential crisis. It may be challenging, but it doesn’t always have to feel like a calamity further down the road. You can still protect your hard-earned assets and ensure the proceedings you go through work best for everyone involved.
Here’s a complete guide to filing for bankruptcy in Florida to get you started. You can also check out others resources to learn how it typically goes in your state.
For a quick gist of it, here are some do’s and don’ts you should remember when filing for bankruptcy.
The Do’s
- Observe Honesty Regarding Your Entire Financial Situation
When you’re filing for bankruptcy, be honest about your financial situation. Don’t leave anything untouched, either deliberately or accidentally.
Sit this through and think about every debt you owe, assets you own, and judgments, lawsuits, or garnishments that are also ongoing. Every single one is very important as an inclusion in your bankruptcy proceeding. Your lawyer can’t help you state your case if you’re not transparent about everything.
Remember, it’s also against the law to conceal assets or liabilities once you’re facing bankruptcy. You risk getting into more or losing your standing in the proceedings, which allows creditors to seize your assets as compensation.
- Create A Personal Balance Sheet
In line with the point above, it’s a good idea to create a personal balance sheet. This lets you keep an accurate account of your assets and liabilities. A balance sheet also gives you a visual guide on how much you owe your debtors and where you are in terms of finances. That way, no debtor gets excluded when you’re finally capable of meeting your obligations.
- Continue Making Payments On Vehicles You Intend To Keep
Filing for bankruptcy doesn’t necessarily mean you have nothing in your bank account. It could simply mean your liquidity may not be as good with debts now getting out of hand. You may still shell out some cash, especially for necessary payments. One of those relates to payments on vehicles you intend to keep.
If you are in default, creditors secured by vehicles can repossess it immediately without notice. Continuing to make payments should help you avoid this.
The Don’ts
- Do This On Your Own
One of the biggest mistakes you can make while dealing with bankruptcy is going about it all on your own. Always hire the services of a bankruptcy lawyer who understands your situation and can provide you with the guidance you sorely need in such troubling times.
Bankruptcy lawyers know a lot of the subtleties of handling debts. Their assistance is crucial to keeping your assets protected.
If it’s your first time filing for bankruptcy, take time to research lawyers with ample experience.
- Transfer Money Or Property
Many still believe that temporarily transferring money or property to trusted relatives can help relieve them from bankruptcy proceedings. But this doesn’t do much to protect your assets at all.
The worst that could happen is that the court may consider those moves as attempts to conceal your assets. Even if this wasn’t your intention, such a case would be difficult for you to prove. It’s only making what would’ve otherwise been a smooth bankruptcy proceeding more complicated.
- Play The Waiting Game
As soon as your debts start sinking your funds to a level you can’t sustain, start the bankruptcy proceeding as soon as possible. Don’t put this off until later, or treat it as something you can ignore. Pretending it isn’t happening will only put you in bigger trouble. So, the sooner you take action, the better.
Court orders and documents will start coming in, along with calls for payment reminders. Ignoring them isn’t a solution as they’ll keep coming back. It’s better to start cutting your losses than risk bigger ones in the long run.
Make It Easier For Yourself
Going through a bankruptcy proceeding is already stressful as it is. But you can make things easier by knowing what you should and shouldn’t do. Above all else, remember your best recourse is to have a lawyer to walk you through the whole process.
