Before Bankruptcy
Many individuals file for bankruptcy without taking the time to plan for the process. While the process is not inherently complicated, you will be expected to adhere to certain norms and guidelines. A error made prior to, during, or after the bankruptcy process can jeopardize your case and result in a dismissal, leaving you without the necessary debt relief.
Before filing for bankruptcy, you must first determine if the process is appropriate for you. Have you contemplated other alternatives, such as a debt management plan or debt negotiation? Is the duration of your financial hardship anticipated to be lengthy? If you answered ""no"" to either of these queries, you may want to consult an attorney before filing for bankruptcy.
In addition to determining whether bankruptcy is the best option for you, your financial situation also affects how your case will be handled. Recognize that the court will require a comprehensive report of your financial history to determine what you may be required to repay or how your debts will be resolved. You must identify your liabilities, income, assets, fund accounts, and financial transactions. You can save valuable time by having the necessary documentation organized and ready to present to the court at the time of filing.
There are actions that may impact the outcome of your case, and your conduct prior to filing will be evaluated. Paying off debts, acquiring additional income or debt, and transferring assets prior to filing are all actions that the court may view as dubious. Paying off debt or increasing your income prior to filing could disqualify you from Chapter 7 bankruptcy eligibility. Accumulating additional debt or transferring and selling assets could be considered fraudulent by the court and result in dismissal of the case. The general rule is to halt all unnecessary expenditure, maintain all assets, and reduce debt payments to the bare minimum for at least 180 days prior to filing.
After Bankruptcy
What is expected of you following bankruptcy is minimal, but crucial to your financial future. Even though you have resolved your debts through bankruptcy, it is likely that your credit is in poor condition. It is essential that you review your credit report to ensure that the most recent information has been included indicating that your accounts are no longer delinquent and are in good standing. Additionally, initiate the use of new credit while keeping balances to a minimum. To maximize your credit score, you must now demonstrate a responsible payment history over a minimum of 12 months.""
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