Preparing For Chapter 7 Bankruptcy
Chapter 7 bankruptcy can be an excellent way to wipe out debt and move toward financial stability. However, the potential benefits don’t make this any less of a daunting process, a statement that can be true no matter how many people have found themselves in a similar position. In 2019 alone for example, almost a half million claims were filed under Chapter 7 of the Bankruptcy Code by non-businesses.
The decision to file for Chapter 7 bankruptcy requires preparations in advance and this is magnified when it comes to gathering important information. It is crucial for individuals to take the time to gather all the documentation that can help support a claim for bankruptcy.
Why is it Important to Prepare to File for Chapter 7 Bankruptcy?
Every kind of bankruptcy works in its own way and Chapter 7 is no exception. In contrast with some other types of bankruptcy which restructure debt but also require a borrower to pay, at minimum, a portion of debts, Chapter 7 instead results in debt being discharged altogether. In order for this to occur, Chapter 7 debtors sometimes face something known as the means test which compares a borrower’s income to the average income in their state. Gathering documents is important because full financial history will be necessary to complete the information required for the means test.
What if the Means Test Isn’t a Requirement for Me?
Even for borrowers who don’t need to go through the means test, it is always essential that any kind of petition submitted before a bankruptcy court has accurate and thorough information. Significantly, intentionally leaving out information about your finances on your bankruptcy disclosures can delay your filing or even result in a dismissal. Further, while obtaining the help of a bankruptcy attorney is almost always helpful in an invaluable way, the guidance and advice your attorney can provide is only as accurate as the information provided by you, as the sole person with full knowledge of your financial history.
What Kind of Financial Information Should I Gather?
In order to maximize the chances of your bankruptcy case going smoothly, you should begin gathering:
- An up-to-date copy of your credit report
- A list of the names and addresses of the people and entities that are owed
- Evidence of medical bills, utility bills, tax debts, student loans, and domestic support obligations
- Information relating to any lawsuits, collections, judgments, or debt
Is Chapter 7 the Best Option for Your Situation?
If you are struggling under overwhelming debt, the silver lining is that you have options available and you don’t have to figure out what your choices are on your own. During these trying times, you should have the assistance of a knowledgeable attorney who will help you stand up and fight on your behalf for a better financial future. As the Plantation bankruptcy attorneys at Nowack & Olson, PLLC, we zealously assist borrowers who are seeking relief under the United States Bankruptcy Code. We understand how many factors go into making the decision to pursue bankruptcy, and we are here to support every step of the way once you decide that doing so is your best option. Contact us today to begin.