The bankruptcy process can be tedious and often requires active participation from the filer.
While it isn't difficult to obtain a debt discharge, there are still some aspects to filing bankruptcy that should be considered beforehand.
More specifically, making sure you are aware of what is required both before and after a bankruptcy can ensure the best outcome possible.
Pre-Bankruptcy If you are considering filing for bankruptcy there are a few things you can do to prepare yourself in order to minimize the risk of mistakes that could jeopardize the outcome of your case.
First, be prepared to have your financial life reviewed with a fine tooth comb.
Having documentation to back up your debts, income and financial transactions can save you valuable time and hassle down the road.
The court may ask you to provide copies of your paycheck stubs, bank statements and your debt accounts.
Organizing this information prior to filing the petition can streamline the process.
Second, bankruptcy laws require that anyone filing for bankruptcy attend a credit counseling course.
This course is designed to provide you with information about your debts, how to manage your finances and smart tips for staying out of debt in the future.
Failure to complete this course, or provide the certificate of completion to the court, could result in a delay or dismissal of your case.
Further, only courses provided by approved credit counseling agencies will be accepted by the court, so be sure to find an approved provider through the U.
S.
Department of Trustee's website.
Also, you should understand that certain actions on your part could influence the outcome of your case.
Your income is the main factor used to determine your eligibility for bankruptcy.
Major changes to your income, such as a raise or second job, could disqualify you from eligibility for Chapter 7 or change how much you are required to pay in Chapter 13.
Also, uncharacteristic changes to your debt accounts or could be viewed as suspicious by the courts.
Rapidly paying off debts, or accumulating more debts, before filing could lead to a case dismissal.
Further, selling or giving away assets prior to filing may be considered fraudulent and could jeopardize your chances at a discharge.
Post-Bankruptcy Once you have successfully completed a bankruptcy case there is still work to be done.
It is your responsibility to ensure you have a copy of all of the paperwork related to your case.
Make sure you keep this information in the event a creditor attempts to make a collection attempt in the future.
Also, not all creditors update account information to credit bureaus right away.
Monitor your credit report and request for your accounts to be updated by any creditors who have not reported the latest information.
Your most important step after bankruptcy is to begin a path to rebuild your credit.
Find one or two small lines of credit to begin keeping manageable balances on.
Keep making timely payments for six months to a year, and your credit will begin to reflect your hard work and positive borrowing potential.