Filing for bankruptcy is a big decision. A lot of legal steps are involved, and you could risk losing some of your property before your unsecured debt can be eliminated. There are a few things you can do before you file your petition with the court to get a head start on controlling your financial situation.
Cancel recurring payments with your bank. If you have stopped the automatic payments coming from your bank it will be less likely a payment or two will go through before the automatic stay comes into effect. That will be extra money in your pocket that you will not have to pay on a debt that could be eliminated in bankruptcy.
Do You Want to Keep Your Home?
If you have a property that you are still paying on, decide before bankruptcy if you want to keep your home and car and make preapproved back payments in a Chapter 13 bankruptcy. Or let them go to the trustee to be liquidated as in a Chapter 7 bankruptcy.
Be careful of any property you sell or give away in the months before bankruptcy. The trustee could decide it was fraudulent and take back the property to liquidate and give the proceeds to your creditors.
Timing when to file
If you are recently unemployed, you may want to wait a few months if you can before you file. If you file soon after leaving a job the last six months of income will be used to determine your income. If you wait for a few months, your income will be considerably less.
Since the last six full months of income is used to determine your median income, if you make a one-time income such as a job during the holidays, you will want to file bankruptcy before the month is over so the income will not be counted.
If you have questions about bankruptcy and would like more information about what you can do before you file bankruptcy, contact a Dayton bankruptcy attorney.