How to Properly Prepare for a Bankruptcy Case

 Posted on October 16, 2023 in Pre-bankruptcy Planning

Filing for bankruptcy can be a complex process with many steps to take beforehand. Being organized and thorough in your pre-filing preparations will help ensure your bankruptcy case goes smoothly and efficiently. Follow this guide to make sure you have completed all the necessary tasks before submitting your bankruptcy petition. A Texas lawyer can help make sure you meet all the necessary steps.

Review Your Finances

Take time to carefully evaluate your complete financial situation, including assets, debts, income, and expenses. Gather recent bank statements, bills, tax returns, and anything else that documents money going in and out. Calculate your average monthly costs for necessities like housing, food, medical care, and transportation.

Understanding the full scope of your finances allows you to determine the best type of bankruptcy filing to pursue (Chapter 7 or Chapter 13). It also helps you complete your paperwork accurately. Being realistic about your budget also helps set money aside for bankruptcy fees.

Complete Required Pre-Bankruptcy Credit Counseling

You will need to take approved credit counseling before their case is submitted. This typically involves a single class teaching financial management tips. At the end, you will receive a counseling certificate to submit to the bankruptcy court.

Gather Necessary Documents

Expect to submit recent pay stubs, tax forms, a six-month housing payment history, investment and retirement account details, insurance information, and vehicle records with your bankruptcy petition. Make copies of titles, deeds, leases, judgments, or lawsuits related to your debts. Any paperwork proving income, possessions, obligations, and expenses needs to be organized and accessible.

List All Your Property

A key bankruptcy document is your “schedules,” which lists all real estate you own and tangible personal property (vehicles, jewelry, electronics, and other similar items). It also includes intangible property (stocks, patents, online accounts). Give your assets realistic current values rather than purchase prices. Accounts and investments will be reviewed and possibly liquidated. Ensure you fully disclose everything you own to avoid issues.

Know Which Assets are Exempt

Some assets are “exempt,” which allows you to keep them during bankruptcy. Common exempt assets include primary home equity up to a limit, one vehicle per family member up to a value cap, and retirement accounts. Understand federal and your state’s exemption laws before filing so valuable assets are properly protected. An attorney can help you determine if certain assets should be converted to exempt forms pre-bankruptcy.

With careful preparation, you can file bankruptcy in full compliance with all requirements while knowing what to expect during the process. Organizing your finances also gets you thinking about how to rebuild post-bankruptcy in a more stable way.

Contact a Schertz, TX Bankruptcy Attorney

If you want help to navigate bankruptcy, a Boerne, TX bankruptcy lawyer can help. You deserve financial freedom; if you qualify, bankruptcy could be one of the first steps to get you there. Call Law Offices of Chance M. McGhee at 210-342-3400 today to get started with a free consultation today.