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If you’ve been thinking about declaring bankruptcy but are intimidated by the legal proceedings for discharging debt, you are not alone. People in need of debt relief are often surprised at the complexities of filing for Chapter 7 or Chapter 13. Chapter 7 calls for asset liquidation, for example, while Chapter 13 requires an acceptable repayment plan. Fortunately, getting started with either is relatively easy if you focus on tackling one task at a time. 

5 Tips for Streamlining the Bankruptcy Proceedings 

1. Evaluate Your Finances 

The first step to declaring bankruptcy is evaluating your financial situation. For example, is your debt even dischargeable, or is much of it comprised of child support obligations, tax burdens, and student loans? It is also wise to consider income. If it’s likely to increase in the coming months or you’re anticipating an inheritance, you may not have to declare bankruptcy at all. 

2. Review Your Credit Report 

Those who do not already review their credit report periodically should pull it up to check for discrepancies. Make sure everything on it is accurate, and consider pulling it from multiple sources to cross-reference the information. You can request one free report from each of the three bureaus annually here

3. Inform Lenders bankruptcy

If lenders know of your intent to declare bankruptcy, they may be inclined to negotiate for debt settlement, which could reduce what you owe considerably; however, some may be prompted to commence collection activities. For this reason, do not inform lenders until you are about to file. Upon filing, an automatic stay will be enacted, which will halt any collection proceedings. 

4. Complete Credit Counseling 

Petitioners must complete credit counseling before they can declare bankruptcy. This course aims to help borrowers determine if they can restructure their debt so there is no need to discharge it. After receiving the certification of completion, you may file it with your petition. 

5. Call an Attorney 

A bankruptcy lawyer will help you navigate the filing process. Your legal team will prepare essential documents, handle all correspondence with lenders, locate nonexempt assets, and ensure you do not inadvertently commit fraud. 

 

If you have made it to step five and are ready to discuss your financial situation with a bankruptcy attorney, turn to Pray Law Firm PA. Located in Pulaski County, AR, this debt relief firm helps clients regain their financial footing. Whether you need to complete an emergency filing to protect your property or stop wage garnishment, you can rely on them for strategic counsel every step of the way. Visit their website to learn more about the bankruptcy proceedings, and then call (501) 771-7733 to schedule an initial consultation today. 

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