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Thinking About Filing for Bankruptcy? Part 2

In our last blog post, we discussed some considerations to take into account when making the difficult decision of whether to file for bankruptcy. While there are many benefits to Chapter 7 bankruptcy protection, it is important for you to understand your options. Here are some further considerations when contemplating bankruptcy.

When considering bankruptcy, you should curb your credit card spending. Running up the balance on your credit cards before filing for bankruptcy is not a good idea. Charges made within 90 days of filing usually cannot be discharged. Also, you will want to adopt better spending habits so you can avoid finding yourself in a stressed financial situation again.

Once you make the decision to file for bankruptcy, choosing the right bankruptcy attorney to represent you is crucial. You will want to interview any prospective attorneys to gauge whether you feel comfortable with them. Filing for bankruptcy can be a very personal and emotional experience, and you want to make sure that you trust the person who will be representing you. Be sure that your attorney explains the process to you and is able to answer any questions that you have.

Also, honesty is critical when filing for bankruptcy. Do not hide or transfer any property, as any transfers made around the time of a bankruptcy can be undone. Consult your attorney before you make any debt payments make any transfers of property.

If you are seriously considering filing for bankruptcy, you might want to avoid using money from any retirement accounts to pay your debts. Retirement accounts are generally protected in bankruptcy, so spending all of your retirement savings might not be in your best interests.

While deciding whether to file for bankruptcy can be difficult, these tips will hopefully provide you with some helpful guidance.

Source: Chicago Sun-Times "Tips for considering bankruptcy" 9/27/10

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