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The decision to file for bankruptcy is a major one, and before you start the filing process, it's important to consider some pre-bankruptcy planning. This proactive phase can help you better protect your assets and interests and prepare you to rebuild your credit in the wake of bankruptcy. Below are three essential tips for pre-bankruptcy planning.

3 Pre-Bankruptcy Planning Tips

1. Avert Bank Set-Offs

bankruptcyA bank set-off can occur when you have multiple accounts through one bank. For example, if you have a checking account and a car loan through your local bank, the bank may opt to apply the funds in your checking account to your car loan once they get notice of your bankruptcy. This scenario is called a set-off, and it is not uncommon for those declaring bankruptcy who have more than one account with a single financial institution.

2. Cancel Recurring Payments

Recurring debit charges are an easy way to keep up with regular payments. But if you are filing bankruptcy, make sure you have canceled all recurring charges to your bank accounts. While this is supposed to happen as soon as you file, it often doesn't, or it takes a while to go into effect. Take the initiative and cancel recurring charges yourself—you don't want to add to your debt once you declare bankruptcy.

3. Consider the Stay

Once you file, an automatic stay will temporarily halt foreclosure action. Take this time to carefully consider how you want to proceed with any property in foreclosure. Work with your bankruptcy attorney to determine whether it is in your best interest to try and retain your property or sell it.

 

Attorney Sam Turco of the Sam Turco Law Offices has been serving the Omaha and Lincoln, Nebraska, areas since 1992. Call (402) 614-7171 or visit the firm's website to schedule a consultation. By taking early action with your bankruptcy pre-planning, you can start making solid decisions for your financial future.

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