Steps to Take in the Bankruptcy Process
To get the most out of your bankruptcy filing you should work with your attorney to come up with a plan that will protect your assets to the extent legally possible while also providing the most debt relief possible. There are some actions that are perfectly legal and some that are not legal, so consulting with your attorney is very important.
Hire a bankruptcy attorney that will fight for you. Bankruptcy is a complex process that most people are not familiar with. It involves the federal court system and derives from federal laws, but also involves state laws regarding property and debtor’s and creditor’s rights. Be sure the attorney you hire is not just filling out forms and getting through your case without looking out for the best end result for you. Also be sure the attorney you hire is well-versed in all the bankruptcy chapters (options) so that they choose the best option for you and not just what they deal with. At Birk Law Firm, your bankruptcy attorney will meet with you and discuss your options with you and along with you decide on the best option for you for filing bankruptcy, or if you can avoid bankruptcy. If necessary, we will file additional court proceedings to void liens and other matters if they will benefit you and result in the best outcome for you.
How to Prepare for Bankruptcy
Pay For Essentials. Before filing bankruptcy, you should try to pay any past-due debts you have on essential items such as your rent and utilities. You would be able to discharge the rent in bankruptcy, but you might not want to if you want to continue to live there. If you can, it’s best to pay your rent so that you can secure your housing situation. The same advice applies to utilities.
Stop Using Your Credit Cards. Sometimes people that are financially impaired use their credit cards to buy groceries and other essential items. But once you decide to file for bankruptcy or closely before you file bankruptcy, you should stop using your credit cards because creating more debt when you have no intention of repaying it is considered fraud.
Open a New Bank Account. If you owe money to a bank, credit union, etc. and you also have a savings or checking account with the same bank or credit union, you should consider moving your money to a different bank. While a bank is not allowed to ask you for payment after you file bankruptcy, they can offset your bank account to pay towards what you owe them.
Stop Automatic Payments. Once you file bankruptcy, your creditors are notified and by law they are prohibited from taking payments from you. However, when you have an automated payment account setup, those payments may not stop immediately. By stopping your automated payments before you file bankruptcy, you can potentially save yourself the amount of those payments and avoid the hassles involved with getting your money back after creditors have illegally taken automated payments after your bankruptcy filing. You can start the payments again at the appropriate time.
File all income tax returns. For those struggling to make it, the task of filing income tax returns often falls to the bottom of the to-do list. You should file all required tax returns before filing bankruptcy or shortly thereafter, preferably before. Your bankruptcy case will be determined by your income and assets, and your tax returns will be used when assessing that information. By filing all tax returns before or shortly after filing bankruptcy you’ll help your bankruptcy process go a lot smoother.
Refer collection calls to Birk Law Firm. After you retain us as your bankruptcy attorney, you can refer all collection calls to us. Keep in mind that we cannot stop the collections until you actually file bankruptcy. You are free to speak with your creditors, but you retained an attorney for a reason, and one reason is this benefit we provide. One exception is if you are working on a loan modification and your attorney is not involved in that process. But in general, you can refer collection agencies to us.
For businesses, you should consider the following:
Should you close your business or can you continue operating if you restructure your debts? The type (chapter) of bankruptcy your company files depends on the answer to this question and other factors. Learn more about Family Farm bankruptcy relief options under Chapter 12.
Do you have a practical plan to operate the business after bankruptcy? You, with your attorney, must submit a plan to the court that is realistic.
Did you or someone else guarantee the debts of the business? Usually a bank requires a small business owner to guarantee a loan from the bank to the business and/or requires a co-signer for the loan. If this is your situation, filing bankruptcy for the business only will probably not relieve the guarantor or co-signer from collections from the bank. Sometimes other creditors also impose these requirements.
A bankruptcy will provide instant protection from some issues, such as foreclosure, repossession, garnishment, eviction or utility shut off. This obviously affects the timing of filing your bankruptcy, which can affect other decisions.
You cannot keep hardly anything private in a bankruptcy filing or proceeding. There is no privacy in a bankruptcy proceeding. All filings are on the court’s website. Virtually all of the details of your finances and other information will be laid bare for your creditors, courts and others.
Operating a business in bankruptcy involves ongoing court supervision. You will have to get court approval for anything that is not in the normal course of business. Usually your attorney can apply for this approval, but of course that costs you money in attorney fees just to operate your business. In some instances, you will have to go to bankruptcy court to testify as to why the court should approve of your request.
ALL YOUR LEGAL NEEDS
Why Choose Birk Law?
Birk Law Firm is a small firm by choice that is big on client services. Attorney Kelvin Birk and his team are responsive to their clients’ needs. When we sign on as your law firm, you can count on us for strong legal counsel, from negotiations to settlement to trial.
Our clients benefit from the intertwining of Kelvin Birk’s legal and CPA background and experience. We provide well-rounded advice to solve both legal and financial issues and to come up with creative solutions. We use modern technology to deliver legal services in a more efficient and client-focused manner than was previously possible.
We provide personalized and compassionate service. We believe that each client’s matter is the most important matter in the world to them, and we strive to treat it that way.