Filing for bankruptcy is a task that not many individuals foresee and plan for, and it is something that one cannot be completely prepared for. There are many questions to ask before filing for it which can aid an individual during the process and help him avoid many unwanted complications.
First, the individual must be clear whether he wishes to opt for a document filing service or an attorney. An attorney will cost almost five times as much as a document filing service but will also provide the individual with in-depth advice and personalized attention. This is a much better alternative than the document filing service and it is highly recommended to opt for the services of an attorney.
When you go for your first meeting with the attorney, you must be fully aware about what questions you should ask a lawyer. Being unaware can result in the attorney charging you a higher fee as he will take more time to understand your case, and all attorneys charge on the basis of time.
There are many details that the lawyer will wish to know about you, on a professional level as well as on a personal level. You will be required to file a detailed schedule of all your assets and debts with a bankruptcy court, so your attorney will most certainly want to look at those details before your hearing. Also, you must be completely open about all your financial affairs and should not refrain from disclosing any information. If that is not the case, you may be accused of fraud and this would severely hamper your chances of discharging your debts. Here are some common questions, the knowledge of which will ensure that the process goes smoothly.
Is Bankruptcy a Suitable Option For You?
The answer to this should help you decide what course of action you must take. A good attorney should be more than willing to give you a list of the options available and suggest suitable recommendations. Find out if you should file for bankruptcy after all or whether you should refrain from doing so and opt for some alternatives.
How Will Bankruptcy Benefit You?
You must be absolutely crystal clear about how you stand to benefit from filing for bankruptcy. Filing for Chapter 7 will carry benefits that will greatly differ from benefits achieved by filing for Chapter 13. You should clearly understand the path you take and how you stand to gain from doing so. Along with being aware of the benefits, also ensure that you know what the repercussions and negative effects will be there.
What Are The Attorney's Credentials?
To leave a matter as important and as critical as filing for bankruptcy in the hands of a novice attorney or an incompetent attorney can bring nothing but further trouble for you. Before you venture into more, inquire from the attorney how much of his practice is devoted to filing such cases and how much he will charge you.
What Is Your Income?
Many states have now begun to enforce much tougher laws, and earning a large income can prove to be an obstacle to discharging your debts. Even if you have a spouse who earns an income equivalent to or greater than the state average, you may not be eligible for filing for bankruptcy. When you consult a attorney, you must inquire about the average income that is applicable for your state.
Do You Own a Home?
Owning a real estate property that is valuable, can also greatly hinder your filing procedure. If it is found that the valuation of your home is high, you may be forced to either sell off your property or convert to a Chapter 13 bankruptcy payment plan. Clear this out with the attorney so that you can choose a suitable course of action.
Do You Own a Car?
Individuals are permitted to keep possession of their automobiles when they are filing for Chapter 7 bankruptcy. The lender of the loan to acquire this automobile is duly notified of this 'reaffirming of the debt'. The lender is also informed but he does not claim the collateral.
Do You Owe Any Taxes?
If there are any taxes that are currently owed by you, you must immediately contact the IRS and request a statement. A competent attorney will tell you which of these taxes can be discharged by the bankruptcy process. Also note that any Government student loans shall not be included in Chapter 7. These loans will compulsorily have to be repaid separately.
Is Your Credit Card History Important?
You need to get details from your attorney regarding credit card frauds. Many individuals purchase a large number of assets on their credit cards and then file for bankruptcy to clear out all those debts. This is an illegal activity and an experienced judge will quickly recognize such an occurrence of fraud by viewing your records.
Will You Get Credit Again?
Filing for bankruptcy does not mean that you cannot avail credit anymore. But it certainly means that lenders will be more hesitant to extend credit to you in the future. It will be immensely beneficial if you adopt some means of credit repair in order to rebuild your credit worthiness.
These were a few basic questions to ask an attorney. Filing for bankruptcy is a very tedious activity and it can be very taxing mentally as well, but there are many others who have undergone it and emerged from it successfully and rebuilt their credit portfolios. So life after it isn't all bad. In order for you to do the same, these questions will prove to be a great help. Do not get disheartened by the complexity of the task and clear out all your doubts and ambiguities with your attorney.
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