If your financial problems are driving you to petition for bankruptcy in order to get out of debt, you need to first take a couple of steps before filing bankruptcy. A bankruptcy petition requires that you figure out your financial situation to know what to put on bankruptcy forms as well as what to tell your bankruptcy lawyer if you’re getting legal help from one. Unfortunately, many bankruptcy lawyers are approached by potential filers who have no idea how bad their financial situation is.
To file for bankruptcy protection with the bankruptcy court, you need to get a clear picture of your finances. If your bankruptcy attorney knows your financial situation, he or she can craft a better debt relief strategy for you. Here’s what you should do:
- Make a list of all your assets and their estimated current value.
- Make a list of all your debts, both secured and unsecured.
- Figure out your household’s monthly income.
- Total your monthly expenses by averaging those of the last three months.
Listing Your Assets
This needs to be done when declaring bankruptcy since the bankruptcy process requires that bankrupt debtors disclose all their assets. This means including those likely to be claimed as bankruptcy exemptions. In assigning value to your assets, some may prove to be more challenging than others. Personal items, vehicles, and real estate are harder to put a price on, so bankruptcy attorneys advise their clients to do the following:
- Personal items – Price them as though you were selling them at a garage sale. You could also check out eBay and Craigslist to see how much similar items are priced. Don’t make the mistake of overpricing them because of their sentimental value.
- Vehicles – Go online to see how your model is selling at sites like Edmunds.com. Factor in your own car’s mileage and condition when determining its value.
- Real estate – Price you property as though you were selling it an absolute auction or you could look at your current tax bill to see how much the county’s property value administrator thinks it’s worth. You could also check out sites like zillow.com to see what the going rate is for a property like yours in your area.
Listing Your Debts
When filing for bankruptcy, you have to make a list of your debts and their corresponding creditors. Include every secured debt (car loan, mortgage, etc.) and all unsecured debts (credit card debt, medical bills, etc.). It’s particularly important to let your bankruptcy attorney know every single creditor. List down all the debt collection agencies that you’ve encountered as well. This way, your lawyer can craft a strategy for dealing with all the debt collectors in your bankruptcy case.
You have to indicate as well what amounts you were unable to pay in your bankruptcy filing. While certain debts such as student loans and child support are not dischargeable, it’s still important to include them. Debts that you cannot discharge directly impact your disposable income, so they have to be factored in as well even if they cannot be discharged.
If there’s a lawsuit filed against you, or if somebody has the right to file one against you, let your lawyer know. Your legal counsel has to see the complete picture in order to advise and represent you well.
Considering Bankruptcy? Consult an Arizona Bankruptcy Attorney Today!
If you want to declare bankruptcy, the smartest first step you can take is to hire a lawyer specializing in bankruptcy law. Being privy to legal advice during this legal process makes the experience go more smoothly with as little pain as possible. You can be guided through all your choices. For instance, the bankruptcy code provides several types of bankruptcy. If you’re after a personal bankruptcy, you can either opt for liquidation or reorganization. Your lawyer will make sure that you file under the right bankruptcy chapter as well as teach you how to file bankruptcy properly so that you don’t violate any bankruptcy laws.
Bankruptcies have helped many people get a fresh financial start. If you want legal help with bankruptcy proceedings, call us at Zolman Law to schedule a free legal consultation with one of our experienced Arizona bankruptcy attorneys.