Top 4 Things You Should Do If You Are Faced with Bankruptcy (and 4 Things You Shouldn’t Do)

By , Posted on Jan 21, 2020
bankruptcy
bankruptcy

Finding yourself faced with bankruptcy and not sure what you need to do? The prospect of declaring bankruptcy is a terrifying idea. Fortunately, there are plenty of resources out there to help you with destroying your financial future.

If you find yourself dealing with debt and want to get collectors off your back, here are four things you need to do and four things you shouldn’t…

What to Do If You Are Faced with Bankruptcy

1. Speak With A Lawyer

While this might seem like a no-brainer, it’s advisable to seek legal counsel if you’re in over your head.

Any competent lawyer can work with you to ensure that you won’t face unwanted harassment from debt collectors and provide the strategic insight necessary to get you out from underneath a mountain of debt. No matter what, seeking out a lawyer who specializes in bankruptcy cases should be your first move.

2. Keep Track Of Any & All Paperwork

Thinking about filing for bankruptcy? There are four things that you should do and four things you should not do. Read on to find out what they are.Thinking about filing for bankruptcy? There are four things that you should do and four things you should not do. Read on to find out what they are.

It’s imperative that you engage in good recordkeeping during your time of financial crisis.

Likely many of these financial records are going to be extremely important as you declare bankruptcy, and it’s advisable that you keep track of the records not only as your bankruptcy case proceeds but long after your case has resolved as well.

3. Avoid Taking On Any New Debt

Further debt has the potential to complicate legal proceedings and can make things even worse with your creditors. If at all possible, avoid bringing any other debt upon yourself in the period of time before you declare bankruptcy.

Just remember, you’ll likely have to explain all transactions that took place before your bankruptcy and it’s best to avoid doing anything incriminating.

4. Consider Financial Education

If you don’t have a history of good financial management, consider taking some financial education courses in order to help you to better avoid debt in the future. These can help you make better financial decisions moving forward and ultimately avoid having to declare bankruptcy again.

If you’re not sure where to find them, don’t worry, we offer plenty of financial education courses and resources to help you out!

What NOT To Do If You’re Faced With Bankruptcy

1. Borrow Money

While it might make sense to turn to family to help with debt you’ve incurred, it can potentially end disastrously.

For one thing, it can mean that you’re merely going to have to wait before you’ll be allowed to file for bankruptcy. On top of this, it’s possible you can be ordered to pay back the money you borrowed in the first place. The bigger picture here is that borrowing money can only serve as a temporary solution at best and might prove to be nothing but nightmare.

2. Turn To Debt Settlement

Debt settlement is seldom worth it. Bankruptcy can be cheaper in the long run and leaves you free from the possibility of creditor lawsuits. In fact, many bankruptcy lawyers say that many of their clients turn to them after trying debt settlement, realizing it would have been easier to file for bankruptcy in the first place. 

3. Use Your 401k To Pay Off Debt

Declaring bankruptcy means you don’t have to worry about using your 401k to pay back a debt. Keep your money and talk to a competent attorney instead. Using money from a 401k won’t help and can only lead to further financial issues. 

4. Put Off Filing For Bankruptcy

One of the biggest mistakes you can make is waiting to file for bankruptcy. Don’t let us alarm you, but if you’re considering bankruptcy, now is likely better than later. While each situation is different, seldom will holding off on bankruptcy actually help you. 

Need a hand with declaring bankruptcy? Mosley Law Firm is here to give you the assistance you need and put you on the road to financial recovery. Reach out to us today!

Lesson Learned: What NOT to Do When Filing for Bankruptcy
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