How to Prepare for Bankruptcy

Now that you’ve decided to file for bankruptcy, it’s time to start the preparation process. 

Here are several steps you can take to ensure your bankruptcy goes as smoothly as possible.

Get Mentally Prepared

Address your fear, address your shame, and get educated.

Fear can cause you to make foolish mistakes during the bankruptcy process. It can cause you to try to hide assets with family and friends (it won’t work). It can cause you to try to conceal some information from the courts.

You must be transparent with bankruptcy courts. Fortunately, bankruptcy never takes everything, and there are many ways to protect the property that matters the most to you.

If you are feeling shame, remember that bankruptcy is a legal process for dealing with your debt and that major corporations always take advantage of this law. In 2021 alone, the United States had 6,691 business bankruptcy filings. Why should you feel bad about getting a fresh start when major corporations with 100 to 1000 times your resources are doing the same? 

Reading up on bankruptcy can help remove the fear and mystery from this process.

Obtain a Copy of Your Credit Report

Obtaining credit report copies can help you find debt and collection items you may have forgotten about. 

You can obtain one free credit report from all three bureaus each year by visiting

Stop Using Credit

Once you know you’re going to file for bankruptcy, you must stop using debt. The court looks back at your debts for 90 days before the bankruptcy to see if you continued to use debt, knowing full well you had no intention of paying those creditors.

There is one exception: you can borrow for necessities like food, gas, housing, utilities, or vital medications. You’ll need to keep receipts of these transactions to prove you spent on necessities should these transactions come into question. 

Don’t even borrow from family members or friends. 

If you’re unsure how you’ll make ends meet without debt, remember that once you file bankruptcy, you will generally stop paying your unsecured debts.

Gather All Your Documentation

You’ll need to bring all of your financial documents to your first meeting with your attorney, including:

  • Your bank statements
  • Your tax returns
  • Your paystubs
  • Most recent copies of every bill
  • Information about every asset you own

Leave nothing out. Dig deep to ensure you’re bringing every financial record you can get. It can be costly to correct mistakes, which can lead to bankruptcy case dismissal. 

Choose a Bankruptcy Attorney 

Having a bankruptcy attorney vastly increases your chance of success. Only 60% of Chapter 7 filers successfully filed without an attorney, and just 10% of Chapter 13 are. 

An attorney can protect you from all of the major mistakes that can derail a bankruptcy case. Contact our office to schedule a free consultation today.

See also:

What to Expect After Your Bankruptcy Discharge 

Are You Languishing in the Pre-Bankruptcy “Sweatbox?” 

5 Bad Ways to Manage Bad Debt


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