Filing for bankruptcy can provide the breathing room you need to regain your financial footing and get back on track. Before you start the proceedings, there are a few critical steps to take. Completing the tasks below will make it easier to discharge applicable debts and protect you from accusations of fraud. 

5 Steps to Take Before Filing for Bankruptcy 

1. Stop Using Credit Cards

As soon as you decide to declare bankruptcy, stop using your credit cards. If you use them within 90 days of filing and spend more than $675 on luxury goods and services—or more than $950 on cash advances within 70 days of filing—the court may accuse you of fraud. 

2. Cancel Automatic Payments 

Paying back some creditors but not others just before filing for bankruptcy shows favoritism and could complicate the proceedings considerably. In that case, the court might attempt to recover the payments so they can redistribute them among all of your lenders. 

3. File All Tax Returns 

If you failed to file one or more tax returns over the last few years, you must do so before pursuing bankruptcy. If you want to file Chapter 13, you will need to provide proof that you filed a return every year for the past four years. Chapter 7, on the other hand, requires your tax return for the past year. 

4. Complete Credit Counseling 

Most petitioners must complete credit counseling within 180 days of declaring bankruptcy. Fortunately, this is a simple course that you can do over the phone. You can expect it to cost about $50 and to take roughly two hours. 

5. Seek Legal Guidance

After completing the previous steps, call an attorney to determine how to proceed with a bankruptcy filing. A lawyer will review your financial situation and help you decide whether to pursue Chapter 7 or Chapter 13, depending on eligibility. An attorney will then prepare the petition on your behalf and guide you through every stage of discharging your debt. 

If you’re considering filing for bankruptcy, turn to Greene Law PC in Hartford County, CT. This law firm has 25 years of experience helping clients navigate complicated legal proceedings, including estate planning, divorce, personal injury suits, real estate transactions, and Chapter 7 and 13. To learn more about their bankruptcy services, visit their website. To schedule a free consultation, call (860) 676-1336.