Bankruptcy is a process to clear your debts and give you a fresh start, free from the burden of unsecured debt. You can stop lawsuits, garnishments, repossessions, and foreclosures—and even escape secured claims on cars or other debts. 

The primary concept of filing can be summed up in one word: disclosure. You have to divulge your entire financial circumstances—the good, the bad, and the ugly. Your bankruptcy lawyer will require substantial documentation before you file, and before it is too late. Pre-filing planning is crucial, as there is a price to be paid if you don’t time it right. There can be some repercussions that only a qualified bankruptcy lawyer can identify and help you solve. 

You will get to keep certain property items, called exempt property, to assist you on the way to your fresh start. Every state has their own list, and Congress has a list of Federal Exemptions that may or may not apply in your state. Maximizing your exemptions through careful planning is one of the most important tasks your lawyer can do, so get qualified counsel.

The day you file, two significant events arise immediately. First, there is an automatic stay against all collections, claims, or other actions against you or your property. This is a significant protection that will give you some breathing room. Second, the Court appoints a bankruptcy trustee to administer your case, get documents and records from you, and ensure you have been honest in your disclosures of assets and debts. Think of the trustee as a commission salesman whose primary job is to take things away from you, sell them, pay him or herself first, and then pay pennies on the dollar to your creditors.

Do: 

Tell your bankruptcy lawyer the truth about all your assets and debts. We are here to protect you from the Court and the bankruptcy trustee. If we don’t know, we cannot protect you. 

The law requires you to explain your financial affairs to the trustee. Therefore, keep financial records, bank statements, receipts, pay stubs, and payments made, as you will be required to send copies to the trustee. Our offices want all this information before we file so we can read it and protect you. 

Don’t:

Never take on additional debt. You cannot get out of debt by borrowing more monies. 

Never spend exempt monies, such as your pension, IRA, 401k, and similar funds, to pay debts. You need to plan for your retirement. 

Never pay select creditors, and especially your family or close personal friends, before you file bankruptcy. 

Always get good counsel from an experienced bankruptcy lawyer. At Sippel Law Firm PLLC, we are honored to continue serving those who need debt relief, and we have been helping the Mohave County, AZ, community for over 40 years. Contact us today for your free initial consultation. Call (928) 753-2889 to set an appointment, or visit their website for more information.