3 Must-Know Basics Before Filing for Bankruptcy

Man in suite filing for bankruptcyTimes do get tough sometimes. Your finances will not be in order all the time. In some cases, filing for bankruptcy is the last option you will have.

But the decisions you make when filing your bankruptcy case are as crucial as the need to rid yourself of debts. Law Office of Davis & Jones, P.C. outlines some of the things you need to know before you engage your lawyers and everyone else on your bankruptcy case.

1. Don’t rush

Bankruptcy rids you of some of your debts. However, you are restricted as to how often you can launch your case. Another issue is that you might plunge yourself into much deeper financial problems, more so during the waiting period. This might be caused by unemployment, foreclosure, eviction from a property under a mortgage, or car repossession due to failure to repay your auto loans.

2. Don’t drain your retirement account

Unfortunately, some people use their retirement reserves to pay off debts that can actually be wiped out by filing for bankruptcy. Before you take such a step, it’s important to consult your lawyer. Remember that you can always find a way to protect your retirement funds during your bankruptcy case.

3. Provide honest and accurate information

One of the biggest mistakes people make is providing fake information on their bankruptcy paperwork. Any misleading information you provide might land you many years in jail or cause you to pay hefty fines. You must provide complete, accurate, and honest information about your assets, debts, income, and monthly expenses, as well as your overall financial history.

Bankruptcy claims often involve a rigorous and demanding process. If you are not careful enough, chances are you will make mistakes. Therefore, it’s important to always work closely with lawyers and financial advisors before and during your case proceedings.