| A Debtor's Guide to Bankruptcies |
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| Written by Alon Darvish |
| Saturday, 21 November 2009 11:09 |
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You may have been told that since a bankruptcy will rid you of your credit card debt you might as well max out your American Express and purchase all of those widgets for which you have been longing. The opposite is true. A Bankruptcy Court will dismiss your claim if they perceive you as taking advantage of the system. To make sure the bankruptcy Court gives you the benefit of the doubt, you should refrain from using your credit cards for 90 days prior to filing for bankruptcy.
You may have been told that since a bankruptcy will rid you of your credit card debt you might as well max out your American Express and purchase all of those widgets for which you have been longing. The opposite is true. A Bankruptcy Court will dismiss your claim if they perceive you as taking advantage of the system. To make sure the bankruptcy Court gives you the benefit of the doubt, you should refrain from using your credit cards for 90 days prior to filing for bankruptcy. You are considering filing for bankruptcy because you do not have enough income to pay your creditors. It is best practice, however, to continue to pay at least one or two of your creditors before you file for bankruptcy. You want the Bankruptcy Court not only to see how you have no other alternative than to file, but you also want the Bankruptcy Court to see that you are the type of citizen who would make all of your payments if you had the means to do so. One of the most important things you can do prior to filing for bankruptcy is to collect certain types of information. This will save you time and stress and help your attorney expeditiously file your petition. You will want to document or gather the following: (1) Mortgage(s) - Determine what your current appraisal value is as well as your pay-off amount, determine the mortgagors information, and determine what your monthly payments are and how many payments you are behind, if applicable; (2) Vehicle(s) - Ascertain the market value of all your vehicles, and if financed or leased, collect the lenders information and the pay-off amount; (3) Personal Property - make a list and place a value on your collective furniture and furnishings, collective clothing and apparel, collective jewelry, cash on hand, balance in checking and savings accounts, and any pensions plans; (4) List of Unsecured Creditors - Collect the addresses of all your unsecured creditors (i.e., credit cards, medical bills, personal loans, cash advances) and how much you owe; (5) Pay Stubs - - Obtain pay stubs or proof of income for the 3 months prior to filing. Be sure you have all of your taxes filed with the IRS. The Bankruptcy court will not allow you to discharge your debt if taxes are left unfiled. Furthermore, as is the case in Los Angeles, some Bankruptcy Courts will require you to furnish your returns from the past two years. It is also a good idea to also provide those returns to your attorney to ensure accuracy when he/she drafts your petition. If you do not have copies of your tax returns, then contact your regional IRS office and have them mail you copies for a nominal fee. A complete accounting of all your expenditures can be extremely helpful in allowing the Bankruptcy Court to get a better sense of your financial pressure. Using your bank statements, your credit card statements, and your memory make a list of all of your regular monthly expenditures. Remember to include expenditures on items such as food, clothing, laundry, medications, taxes, alimony, school expenses, and personal care items. Retaining a specialist is always the best form, especially when dealing with complex matters. Just as it would be difficult to obtain a favorable result if you performed a complex medical procedure on yourself, it will likewise be difficult to obtain a favorable result if you try to file a bankruptcy yourself. Therefore, hire a qualified bankruptcy attorney to help you file and handle all the work for you. DISCLAIMER: This article is provided as information only and is not to be taken as financial advice. If you are contemplating a fresh start, think about filing for Bankruptcy. The Law Offices of Alon Darvish helps individuals file for bankruptcy. |