If you’re thinking about filing for bankruptcy, this option may be the solution to your financial troubles—but only if you approach it correctly. A bankruptcy under the wrong circumstances can come back to haunt you more severely than debt ever did. To make sure you’re filing correctly and making the most of this option, here are a few tips to keep in mind.
Choose the right type of bankruptcy.
There are several options available, but the ones you’re most likely to need are Chapter 7 and Chapter 13. Chapter 7 completely erases debt, but does not allow you to keep many assets. Chapter 13 will let you keep most belongings, but you must repay the debt over time.
Get legal advice.
While it is legal to file for bankruptcy without the help of an attorney, it is impractical in most cases. An attorney will help you navigate the law, identify exemptions, and defend your interests throughout the process.
Look for exemptions.
Depending on how you file and what the situation is, many proceedings will allow let you keep a house and certain other assets. However, this isn’t automatic—you have to identify these exemptions and include them in the application.
Ignore other options.
Bankruptcy is not a magical way to erase debt for free no matter the situation. If you have a stable income or assets you could liquidate, you have the means to get out of debt, and the court will likely require that you do so.
Try to cheat.
The number one way to hurt yourself when filing is to hide or exclude assets. The court will comb through your financial history. Possessions that are sold too cheaply or given away, or you failed to report, may cause you to lose the case.
Take it lightly.
Before you make the final decision, talk to an attorney and consider the issue from all angles. Bankruptcy will affect your credit for years to come and can dramatically change your living situation. Make sure it’s the right option before moving ahead.
By paying attention to these tips, you can make the filing process smoother and confirm it’s the right decision. Get in touch with an attorney today to become debt free.
If you’re considering bankruptcy or need other legal help, choose The Gil Law Firm in Dothan, AL. Rafael Gil III offers legal advice for clients in Alabama, Georgia, and Florida, whether your case concerns disability, personal injury, or bankruptcy. For a free consultation, call (334) 673-0100 or learn more about the practice online.