Gathering Bankruptcy Information
If you’re in financial distress, you may feel compelled to petition for bankruptcy to get out of debt. The first thing you have to do before filing bankruptcy is to figure out your financial situation. Oftentimes, people who approach bankruptcy lawyers for help in filling out bankruptcy forms and other preparation work for declaring bankruptcy don’t realize how big their financial problems truly are.
To ascertain that you should actually file for bankruptcy protection, get a clearer picture of your household finances. To do so, you need to take the following steps.
- List down all of your assets and estimate their current value.
- List down all your secured debts (mortgage, car loan, etc.) and unsecured debts (medical bills, credit card debt, etc.)
- Determine the monthly income of your household.
- Calculate the average of your household’s monthly expenses by looking at what you spent in the last three months.
This process will give you a close estimate of your financial situation. With this, your bankruptcy attorney can have a better idea of what debt relief solutions are suitable in your case.
What Are Your Assets?
A bankrupt debtor who files for bankruptcy protection with the bankruptcy court is required to disclose all assets, even those typically included in the list of bankruptcy exemptions, as well as give an estimate of each property’s current value. Certain assets are easy to value, e.g. bank account funds, life insurance, stocks, and certificates of deposit. Other assets such as real estate, furniture, and vehicles are not quite as easy.
What a bankruptcy lawyer would typically advise is to value household items as if they were to be sold at a garage sale and real estate as if it was to be sold at an absolute auction. Don’t make the mistake that most debtors make of overestimating the value of personal property because of sentimental attachment to the items.
Another thing you can do to gauge the value of your possession is to see what similar items cost on eBay or Craigslist. Meanwhile, vehicles can be valued based on what’s on Edmunds.com and other related sites, although it’s also important to factor in condition and mileage when putting a price on them.
Real estate, on the other hand, can be valued based on the current tax bill which indicates what the property value administrator of its county thinks it is worth. Online, Zillow.com and other similar sites can give an idea of how much properties in the area are going for.
What Are Your Debts?
Those filing for bankruptcy are also required to disclose all their actual and potential debts in their bankruptcy petition. Their bankruptcy attorneys must also be informed which creditors they owe and which debt collection agencies are after them so the lawyers can better assess what course to take in dealing with these parties.
For your bankruptcy filing, it is advisable that you make a list of all your debt collectors and the approximate amount you have been unable to pay. There are certain debts that are not dischargeable like student loans and child support, but you should still include every creditor even those involving debts you cannot discharge as they have a direct impact on your disposable income. Advise your lawyer as well if there’s a lawsuit filed against you or if there’s somebody who may have a right to file one against you.
Considering Bankruptcy? Contact a Kentucky Bankruptcy Attorney Today!
There are many factors you need to consider if you want to declare bankruptcy. The most prudent first step is for you to hire a lawyer specializing in bankruptcy law, so you can get legal advice on this legal process. The bankruptcy code presents different types of bankruptcy. Those after personal bankruptcy have the option of liquidation or reorganization. You need to make sure that you file under the most fitting bankruptcy chapter and that you are guided on how to file correctly lest you make serious mistakes that could cost your bankruptcy case.
Bankruptcies have given many filers the fresh start they need. If you want to go through the bankruptcy process to rectify your financial situation, get appropriate legal help. Call us at Farmer and Wright, PLLC to schedule a free legal consultation with one of our experienced bankruptcy attorneys.