06 Jun Planning For Bankruptcy
Creating a plan for bankruptcy allows you to keep more property, eliminate debt and ensure that your case proceeds smoothly. There are a few different things you can do in your plan to make the process easier, an easy one being hiring a lawyer for legal assistance.
Timing your bankruptcy filing correctly is a major key when creating your plan. A bankruptcy discharge only eliminates debt that exists at the time your case is filed. Debt sustained after your filing date is not considered part of your discharge. If you know that you’ll encounter additional debt soon it may be beneficial to delay your bankruptcy. However, if you charge your credit cards or bring about debts knowing that you will not pay them back, it can lead to issues such as allegations of bankruptcy fraud or criminal investigation
Additionally, if you have recently transferred assets out of your name, delaying bankruptcy can help avoid the trustee getting the property back through a struggling process of a bankruptcy clawback.
Make sure to review and plan your exemptions carefully. Each state has different set bankruptcy exemptions. Before filing for bankruptcy, review the exemption laws for your state. This includes checking if you can keep all of your property. You’re allowed to protect more of your property by engaging in a reasonable amount of exemption planning as long as it’s done appropriately.
You may also be able to convert your nonexempt assets into exempt assets before filing your case. If your nonexempt property is a liquid asset, it is best to protect it by spending it on necessary living expenses to get your balance as low as possible before your filing date. However, there is a fine line between permissible exemption planning and bankruptcy fraud. If you are unsure what could put you over the edge and into criminal activity, consider contacting a lawyer.
Finally, remember to budget appropriately. Create a realistic budget so you have the best chance of completing your case. Monthly payment amounts depends on income, expenses and types of debt. When planning for bankruptcy, you can generally stop paying creditors whose debts will be discharged in your case. These creditors often include credit card debt and medical bills.