Bankruptcy can be a welcome relief when you are caught up in debt. And if you get it right, personal bankruptcy can allow you to discharge or restructure and repay your debts.
But bankruptcy can be a confusing and scary process, to say the least. Fortunately, you can take certain steps to ensure that your debts are successfully discharged and that bankruptcy provides the relief you need to turn over a new leaf, financially speaking. Here are some of these steps:
Make a list of your debts and assets
It’s important that you compile a list of your debts. This will help you get every creditor into your bankruptcy case. On this list, be sure to include each creditor and the amount you owe them – whether the debt in question is dischargeable or not. Simply obtaining a copy of your credit report may not be enough since some creditors never report to credit bureaus.
You also need to list your assets. Remember, what is not listed while filing for bankruptcy may not be protected. In fact, leaving out any assets can land you in trouble as you may be accused of bankruptcy fraud.
Sign up for financial literacy courses
Before your personal bankruptcy can discharged, you will have to complete two courses – credit counseling and debtor education courses. You must complete the credit counseling course before initiating the bankruptcy process.
Next, you must complete the debtor education course before your personal bankruptcy can be discharged. It’s in your best interest that you start prepping for these courses as soon as it’s clear that bankruptcy is inevitable.
Bankruptcy is not the end of the world. In fact, it can be a great way to start over. Understanding the steps to take and the missteps to avoid can ensure that your bankruptcy quest is successful and that you receive the relief you need to get back on your feet.