Bankruptcy is a legal proceeding that is very complex and that is why learning everything that you possibly can about the process is so important. The more you know, the better able you will be to cope with everything that is to come.
Search the Internet for information about bankruptcy and get in touch with a professional in the field to find out all that you need to know. Be aware that the laws regarding bankruptcy underwent changes in 2005 so take the time to find out how these laws will affect you.
Bankruptcy as a Last Resort
Bankruptcy should not be the first option you think of when you begin to have financial troubles. Instead it should always be the last resort. Explore other possibilities such as debt consolidation or more effective budgeting.
Enlist the services of a bankruptcy lawyer and explain your situation. Then be open to the suggestions that he or she has to offer you. Look at all sides of the situation. The lawyer's insights and suggestions should help you gain perspective and assist you in making the proper decision.
If Bankruptcy is a Yes
If after careful consideration of all of the facts you decide to go ahead with filing for bankruptcy then you need to gather together a selection of paperwork. The paperwork needs to be provided to the lawyer who is handling your bankruptcy.
Always make more than one copy of everything you give to the lawyer. You should have copies of every piece of paper that he or she has.
Paperwork for Bankruptcy
What paperwork do you need? You don't want to drown in paperwork so make sure you have all of the essentials.
To start, make sure you have six months worth of your latest pay stubs. If you have changed jobs in the past six months then obtain pay stubs from your previous employer if need be. Tax returns are also essential paperwork when you file for bankruptcy. You need the last two years worth, but if you have more than that then all the better.
Whatever bills you owe to any company whether it is a credit card bill or money you owe to a store for a couch you bought a year ago, make sure the lawyer gets a copy of it. In the same way, any letters you have received from collection agencies should be included in this. You need statements that clearly show on paper how much money you owe to various creditors.
You need to provide statements of all of your bank accounts to the bankruptcy lawyer. This includes your checking account and your savings account. It is wise to have statements for the past two to three months if you can get them.
In the same way, if you have a retirement account such as a 401k or an IRA then you need statements for those as well.
If you own any real estate then you must be able to provide the documentation for it. This includes such paperwork as appraisals, deeds, and tax assessments. If you are making mortgage payments on your home and/or are paying on a car then bring the paperwork with you to show your attorney.
You can discuss with him or her whether you would like to include these items in the bankruptcy or reaffirm them. To reaffirm them means that they will not be included in the legal proceeding and that you will commit to making your payments every month as required.
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