You find yourself in a hole of debt, and you can feel that a bankruptcy is going to be in your future, what do you do? Make sure you plan for the future! There are essentially three key items that you need to consider before filing for bankruptcy: The timing of your bankruptcy, budgeting your bankruptcy, and taking into account the exemptions you will be eligible for. Let’s take a closer look.
What is so important about the timing of your bankruptcy? As we have discussed before, a bankruptcy will only eliminate debts that are existing at the time of the filing of bankruptcy. If you file for any debts after you have filed for bankruptcy, they will not be cleared. For instance, if you know that you will be going into credit card debt soon because you don’t have enough to pay your bills, then it would be smart to wait until that debt hits until you file for bankruptcy. The pressure to file will be intense, but to negate all of your debt, it is best to wait.
Next, be sure to budget correctly. There will be creditors who will be looking for payment of your debts, which will take a lot of your money from your pocket. If you know you will be filing for bankruptcy, stop paying them! This is simply wasting money, you are paying people which will essentially be cleared once you go through with the bankruptcy. Spend the remaining you have on something more important, such as your car payments or your home mortgage.
Lastly, take a look at what exemptions you qualify for. Each state has different exemptions, so make sure you consult with your lawyer (call me!) to find out what exemptions are in that state. One thing to remember, you are allowed to preplan for exemptions, but only in good faith. If there is excessive exemption planning or systematic conversions of assets, it may be considered bankruptcy fraud instead of exemption planning.
To appropriately pre plan your bankruptcy, make sure you hire a lawyer who has experience in the bankruptcy field. Most notably, call the Law Offices of Nicholas J. Del Pizzo today to start your road to recovery from debt!