| What to Avoid before Filing for Bankruptcy |
| Written by jessica Alba | |
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Sometimes, it is a series of bad financial decisions; sometimes, it is due to a lost job; sometimes, it is the result of a catastrophic illness or accident. Whatever the cause, if you are on the brink of filing bankruptcy, you are not alone. You are among millions of people who have come to the end of their financial ropes, and they are looking for a safe place to let go and land softly. But, to not make matters worse, you need to know what to avoid before filing for bankruptcy. You cannot simply wake up one morning and decide it is time to file bankruptcy today. The process does not happen in a single day. You will need to contact a bankruptcy lawyer, determine if you qualify for bankruptcy under the law, and get all of the proper paperwork filed with the court. You probably did not get in over your head with debt overnight. So, do not expect for the financial pressures to be eased in a day.It will take time to go through the legal process. In the meantime, you need to make sure not to dig the financial pit, that you find yourself in, any deeper. You need to start making good financial decisions right now. For example, do not borrow any more money! Absolutely, none! Do not even ask a family member for money. Start living within your means today! Do not try to get any loans to consolidate bills. Do not ask for any type of loans, from anyone. Cut back and only spend what is absolutely necessary. Instead of steak for supper, you might have to learn to like beans. You have no entertainment budget. You may want to carpool, take the bus, or ride a bike to work, so you do not have to buy so much gas. Conserve your resources. Do not pay on private debts. In other words, if you owe your great aunt Bessie money, now is not the time to try and pay her back. Your best friend can wait for the money he/she loaned you months ago. In addition, if you have a business partner, do not make an effort to pay him/her back, until you have completed the bankruptcy process. If you are in the process of filing bankruptcy, do not make any major life changes. Now is not the time to be getting married or divorced. You do not want to add to the confusion and financial burdens that you are already facing. You have enough of your proverbial plate, without topping it off with more debt issues. When you are already facing a boatload of debt issues, you need to play your financial cards close to your vest, so to speak. In other words, if a creditor has not already contacted you, do not give them any information. Basically, mum is the word. If you are already in financial hot water, why would you call a creditor that has not been hassling you? At this point, any financial information is on a need-to-know basis. If they do not ask, do not tell. However, no matter how difficult your financial situation may be, NEVER ignore a lawsuit! If you think you are in a financial pickle now, it will be nothing compared to your problems, if you ignore a legal action. You do not have to be present for the judge to bring a gavel down on your misery. You could have a judgment placed against you that will only compound your financial troubles. Plus, if you are already obligated to pay, and you ignore it, you can go to jail. Do not quit your job! Remember, now is not the time to make any major changes in your life. Even after you file bankruptcy, you are still going to have financial obligations. Not all of your debts will be forgiven. For example, if you have student loans, you will have to make arrangements to pay them off in full. If you neglect them, future paychecks or income tax returns can be garnished. Speaking of income tax, if you are behind in filing, have them prepared and ready to go, but do not file your returns, until your bankruptcy lawyer gives the okay. Again, do not make any financial decisions, without first consulting your lawyer. If you are filing bankruptcy, you want to make sure to follow the proper process and protect your assets as much as possible. In short, filing bankruptcy is not a quick fix for a problem that has been years in the making. But, today is the time to start making wise financial choices. Until all the paperwork has been signed and the legalities worked out, do not make any major financial decisions are life-altering changes that can affect bankruptcy. Follow the advice of your lawyer, and do what you can to protect your assets. |
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