Many debtors rely on the bankruptcy protection granted filers when they petition for bankruptcy. They look forward to the automatic stay, an injunction that’s put in place allowing them to protect their assets from the debt collection activities of their creditors and other collection agencies. There are ways to prepare for the bankruptcy process so that you get to spare your finances as much as possible. When you decide to file a bankruptcy petition, make sure you take some smart steps before and after filing for bankruptcy.

Bank Accounts

Remember that if you don’t have much money in your account, the bankruptcy trustee can’t take much from it either. For this reason, it’s prudent to pay your important bills with your bank account funds before filing for personal bankruptcy. Trustees are entitled to take money from debtors’ nonexempt bank account funds in bankruptcy cases. You should take note though that it’s rare for bank accounts to be included in the list of bankruptcy exemptions, and when they aren’t non-exempt assets, the coverage is usually quite small.

When you’re filing bankruptcy, your bank might find out and choose to freeze your account for your unpaid creditors. If this happens, you can ask your trustee to have the bank lift the freeze so you can access your account.

Set Offs

prepare for bankruptcyThere are instances wherein the debtor has a loan or credit card debt with a bank at which he or she holds an account. In such a case, the bank may be allowed a set off, which lets it take money from the account to pay back the debt. If you’re considering filing for bankruptcy, ensure that your outstanding loans or credit card debts aren’t with banks where you have account funds.

Another possible set off to avoid involves security deposits with utility companies such as gas and electricity. A company may take your deposit and use it to set off what you owe when you file for bankruptcy. This means that you’ll have to provide a new deposit. To avoid this scenario, postpone declaring bankruptcy until you’ve paid your bills. You could also add to your deposit prior to your bankruptcy filing. Just keep in mind that utility companies shouldn’t stop providing you their services for unpaid bills when you declare bankruptcy.

Automatic Payments

If you’ve authorized automatic deductions to pay your creditors, these will continue until they receive notice that you have filed for bankruptcy. It may take them a week to finally be notified, so you might want to do the notification yourself or through your lawyer. You may do this through fax or email. Make sure that you inform them of your filing date, your bankruptcy case number, and the bankruptcy court handling your case.

Before you file for bankruptcy protection, make sure that you first stop all authorized deductions from your paycheck, credit card, or bank account.  If you don’t, you may encounter trouble making your monthly income suffice so that you can’t afford to pay for your basic expenses. Also, ensure that you address any situation in which a company is authorized to charge their services to your credit card.

It’s important to note that a debtor filing for bankruptcy must take care of any situation wherein a creditor is allowed to take money from his or her bank account or paycheck to settle a dischargeable debt.

Make Sure You’re Prepared to File Bankruptcy! Call an Arizona Bankruptcy Attorney Now!

For a debtor to file for bankruptcy in Arizona with as much prudence as possible, the legal advice of a bankruptcy lawyer is paramount. There’s more to bankruptcy filings than just filling out bankruptcy forms and submitting the right documents. Assistance throughout the bankruptcy proceedings, as well as, the guidance before and after bankruptcy provided by bankruptcy attorneys, can spell the difference in your bankruptcy experience.

Legal help is invaluable in bankruptcy. There are different types of bankruptcy provided in the bankruptcy code. You need expert insight in choosing between the liquidation or reorganization bankruptcy chapter, learning how to file the petition for bankruptcy, and navigating through the process until you arrive at the bankruptcy discharge. In the duration, you must make sure to abide by bankruptcy laws.

If you want debt relief solutions for your financial problems, call us at Zolman Law to speak with one of our experienced Arizona bankruptcy lawyers.