one. CONSOLIDATION OF MY DEBT IS BETTER THAN BANKRUPTCY.
On paper, consolidation seems like a good and viable option. However, in practice, consolidation rarely works, and experience shows that, in the long run, people do not save money, but actually end up costing them more.
2. DON’T WAIT UNTIL YOU’RE BROKEN BEFORE CALLING A LAWYER.
If you’re not going to be able to catch up on all your bills and get by, you’re wasting your money. Filing bankruptcy will eliminate all your debts. There’s no point in paying bills that will go away anyway. Save your money to pay the filing fees anyway, that will be a lot cheaper than paying the bills you can’t afford.
3. BANKRUPTCY WILL RUIN MY CREDIT.
In fact??? If you can’t pay your bills, chances are your credit already stinks. Filing bankruptcy will not make your bad credit worse. On the contrary, when you file your credit you will start to recover if you are smart about building it after you file it. Bankruptcy is a way to fix your credit and debt problems, not the cause of them.
Four. DO NOT PAY YOUR PARENTS AND FRIENDS BEFORE SUBMITTING YOUR FILE.
Now I know what you are thinking, it sounds bad but by not paying your family and friends you are actually saving them a huge headache and trouble. In bankruptcy, the trustee (the person who oversees your case) can go after your parents and friends and take the money he paid them to pay that money to other creditors. Your family and friends will not be happy if you drag them into a legal process because you paid them.
5. DO NOT PAY YOUR CAR LOANS BEFORE YOU FILE BANKRUPTCY.
By having a bond on your car, you protect the car in the event of a bankruptcy. The trustee is trying to find any assets (such as your car) that you own that can be used to pay your creditors. Your car loan typically makes that option unfeasible and the trustee may not pursue the sale of the car.
6. DON’T TRY TO HIDE ANYTHING, DISCLOSE EVERYTHING YOU HAVE.
Failing to list any property you own can potentially lead to criminal prosecution against you for bankruptcy fraud and cause you to lose your discharge (which eliminates all your debts) in bankruptcy. Also, it’s like the trustee is magic, he usually ends up finding out everything, it’s just not worth it considering the penalty you face if you’re caught lying.
7. DO NOT PUT YOUR MONEY IN SOMEONE’S ACCOUNT OR GIVE THEM YOUR PROPERTY.
On your list of the worst things to do when filing this, 1(b) might be right behind the one just mentioned. It is very likely that the trustee will recover the money and the property. This applies to any transfer within one year of filing. Like #6 above, if you do this, you risk not having your debt forgiven.
8. DO NOT LIQUID YOUR RETIREMENT ACCOUNTS.
Your withdrawals are protected, by liquidating them you go from being a protected asset to a general asset with which the trustee can pay debts. You’re still going to need to retire one day, so save if that’s what you’re there for.
9. FILING BANKRUPTCY DOES NOT MAKE YOU IMMORAL OR A BAD PERSON.
Look, this is not meant to be a philosophical or religious statement. If you don’t have money, your number one responsibility should be meeting your family’s needs. The law allows people to file for bankruptcy as a way to deal with debt. Creditors use the law to help themselves in the same way through tax subsidies, penalties, and lawsuits. Whether or not this is a justification for applying, it is the reality, it is okay to apply.
10 I DON’T HAVE A TENTH BUT I THOUGHT TEN SOUNDED BETTER THAN NINE.
Take time to think about your options, but not too long. You are wasting your money and stressing out on things that can be so easily fixed.