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Top Things You Need to Consider Before You File for Bankruptcy

When your negotiations with creditors have failed, repossession is imminent, and the foreclosure proceedings have already begun, you will feel at your lowest point in life. Your income, in this situation, may not be enough to cover your medical bills no matter how small they may be. When you have reached such a point in life, it is time for you to consider filing for bankruptcy. However, bankruptcy laws have evolved and people are constantly finding it hard to file. Some of the things to consider when filing for bankruptcy are discussed in this post.

The most important thing you can do while filing for bankruptcy is to disclose your expenses, income, and assets in the petition. When you disclose your income, you are in a good position for a debt discharge. You will have proven to be honest to the creditors and you can proceed to repay your debts starting with those that have the highest priority. If you do not disclose your income, you might lose the right to a discharge of debt as well as face criminal charges.

When repaying debts, do not withdraw funds from your retirement account when you have run out of cash. This is because bankruptcy laws normally have exemptions that protect your assets which include retirement benefits. Weigh all the negatives and positives of using up these funds before you withdraw anything. If you are in a position where you cannot repay debt, just file for bankruptcy and channel your retirement benefits to be used for your personal needs.
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The aim of bankruptcy is to discharge your debts hence you shouldn’t raise a red flag by transferring ownership of your assets to family members. All the transfers you make will be looked into and addressed as an attempt to reduce your assets. When it is determined that you are trying to reduce your assets to cheat your way in bankruptcy law, your right to a discharge will be taken away.
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Don’t use credit cards close to the time you are filing for bankruptcy. Spending using credit cards at this moment when you are filing for bankruptcy is a clear indication that you will not be able to repay for the amount you are spending. Using credit cards yet you cannot pay your debts shows that you know what you are doing yet you are still carrying on intentionally and this will cause major issues in your bankruptcy case. To file for bankruptcy successfully, you should consider the things mentioned here. Have a positive attitude through it since bankruptcy isn’t the end and you’ll have a chance to reorganize your finances.