Jul 11
21
My Guide To Filing Personal Bankruptcy
If you have found this website, inevitably you are either considering filing personal bankruptcy protection, or you are in such tight financial hardship that filing bankruptcy protection seems like your only option, hence you are looking for more information regarding this whole filing process. If you have already made up your mind after doing all the due diligence, then fill out the form to the right of this blog to find a qualified bankruptcy lawyer serving your area. It is important to find a bankruptcy lawyer around the area that you live in, specifically since the bankruptcy law between states can vary somewhat. Sure, you can follow the information given by the United States Courts website about filing bankruptcy, but this complicated process should be left to the professionals.
Step 1 before filing personal bankruptcy
Take your time and figure out all your expenses and outstanding debt, ideally down to every single dollar. This is important because you must know your financial situation before making a life changing move such as filing bankruptcy.
Step 2 before filing bankruptcy
Once you have a clear picture your monthly expenses, and knowing your monthly income, you should be able to get a good idea if you can “afford” your expenses. Let me give you some simple examples:
Ex #1. You have $2,000 monthly expenses, $10,000 in debt and $3,500 monthly income.
This is not a good candidate for filing bankruptcy. If you are earning $3,500 a month and you have $2,000 in expenses, then you have over $1,500 leftover which you can use to pay off the debt. Even if you just pay off $1,000 per month, you can pay off the $10,000 debt in less than 1 year.
Ex #2. You have $2,000 monthly expenses, $100,000 in debt and $3,500 monthly income.
In this example, this is a “good” example if you choose to file for bankruptcy protection. Given that you have $1,500 to spare per month, it will take you over 66 months or about 5 1/2 years to pay off the entire $100,000. And this means that you cannot have any other expenses during this 5 1/2 year period. This means that you cannot take an unexpected vacation, or have any accidental breakdown of your car which will require money to be repaired.
Step 3 before filing bankruptcy
Once you have determined that filing bankruptcy is your best option financially, make sure you are prepared for the emotional aspects of doing so. Note that you should be prepared to deal with emotional “scars” such as:
- Bad credit score
- Bad credit history
- Emotional stress of not having any credit
I found myself in this situation after filing for bankruptcy. I was left with bad credit score and credit history. With that, it means that I will not be qualified for any kind of loans in the near future. And even though I now know what I have to do financially to get myself back into a favorable position, it is still disheartening sometimes knowing you cannot afford that extra $500 of expense, for anything that you have been “dying” to buy.
Step 4 before filing bankruptcy
Once you have made up your mind that you are filing bankruptcy, you should look for professional assistance to do the actual bankruptcy petition. It is true that there are computer software that you can purchase that can help you with the bankruptcy filing, but I personally would not trust such an important event in my life to a computer program. I would want to talk to a professional and qualified bankruptcy lawyer who will be able to guide me through this difficult time. By using a bankruptcy lawyer, he or she will also be able to help me determine what I will be able to keep post bankruptcy process. I find that having the expertise of a bankruptcy lawyer during the pre bankruptcy and post bankruptcy process helps me a lot through my transitional period and eased my anxiety and gave me the peace of mind.