Today more and more people are getting into debt and cannot get out. The first thing that pops in your head is to file bankruptcy. Since the new bankruptcy laws were put in place it is harder to file and even harder to find a lawyer who will represent you. Understanding the laws first, helps in determining if you are eligible. Once you are, having the right paper work and having everything in order before you even meet with an attorney is crucial to have a successful bankruptcy.
First thing to consider is the new bankruptcy guidelines before you even start calculating debt, assets, expenses, etc. Here are a few important guidelines that will help you in the decision if bankruptcy is right for you. The new bankruptcy law says that if your income is less than the median income in your state you are eligible for filing chapter 7. People with higher income than the median will either have to choose not to file or file a chapter 13 and pay back some of their debt (Nolo, 2009).
Second guideline to the new law indicates that you have to attend a credit counseling session. There are rules to this when it comes to who you can see. There is a list of certified credit counseling places at http://www.usdoj.gov/ust. The requirement is, only that you attend; you do not have to do what plan they come up with if it doesn’t work for your situation. After completing the sessions, you have to give the judge the proof you were there and the plans they came up with. If the judge feels that one of the plans will work for your situation, you are required to commit to that plan and cannot file bankruptcy (Nolo, 2009).
One thing to keep in mind, attorney’s have new laws they need to abide by, so it is not going to be easy to represent you. Once you have cleared the two guidelines than it is time to file. Deciding what type of bankruptcy is not what is important in the beginning. Having the correct paper work is the most important thing. Without having all you need the process will be prolonged and more debt will incur within that time. Here is a list of things that you will need before you call and make an appointment with an attorney.
Document of Credit Card Debts/Medical Debts– To make it clear to the attorney what the debts are and who are the debtors is to make an excel sheet. In the first column you want to put the name of the credit card company. For an example, don’t put MasterCard for the name the card, put the name of the credit card issuer. There are many companies who carry the MasterCard logo. The second column should be the account number. Make sure to list the complete account number. The third column should be the balance. The fourth column should state the month and year you got the credit card and the last date used. The next column should list what you used that credit card for and the last column should be the name and the address of the credit cards contact person(s).
List all Assets– This includes everything of value that is worth $1,000.00 or more. Things that would be listed on this would be your home, which will include the purchase price, balance of mortgage, the fair market value, and the copy of the deed. You must list all of your vehicles. With this you need to include the private party sale price of the vehicle. Don’t think that your wedding ring or any other jewelry is safe, because it is not. If your wedding rings are worth more than $1,000.00 you may have to give your ring to the courts to pay for your debts if the option for you is chapter 13. List those plat panel TV’s, laptops, desktops, anything that you own that is worth more than $1,000.00. This is a timely task so take your time and go through all your assets and make sure you list everything that would be relevant. Not listing or claiming everything you have worth value may lead to trouble in the future of the case.
Last 2 years W-2’s– You can also bring your last two year tax forms, like the 1040’s or any other tax forms you used. This is for to see what your income has done in the last two years and to if you qualify under that income guidelines.
Recent Paystubs– Bringing paystubs will show proof of employment and the income you are claiming you get every month. If you just recently changed jobs in the last month bring your last employment paystubs with you. This will show that you have had steady work even though you started a new job.
Monthly Budget– This is very important. Today the reason why people are not paying their debts is because the cost of living has sky rocketed. Included in this budget should be everything from your monthly mortgage payment to vet expenses. This gives the attorney a clear picture on what is going out every month and it gives a clear picture why you can’t pay your debts.
Hiring Fee– Make sure to call ahead before your appointment and ask what the hiring fee is. This is very important if you want to get started right away getting a fresh start.
Being prepared for a bankruptcy appointment is very detailed. Not having all the information needed will stop the process of getting the court room and hopefully getting those debts erased. Make sure to follow the new guidelines before picking up the phone to call an attorney. If you don’t figure out your income level you will be wasting the attorneys and your time. Being prepared will get you the fastest results and hopefully a new start to better choices.
Nolo, 2009, Bankruptcy: Deciding Whether To File, retrieved on February 6, 2009 from, http://www.nolo.com/article.cfm/ObjectID/B0B66870-4C52-4303-919B10B9611D3EF9