How to protect yourself before filing for bankruptcy
When individuals are experiencing financial trouble, there are many things that they may do to try to prevent the problems from becoming worse. They might take out loans to try to pay some of their bills, or withdraw funds from retirement accounts to deal with immediate expenses. Some might sell assets or work with debt relief companies to find ways to address the financial challenges they are experiencing. They wait until they start receiving notices from their creditors before taking any action to address their concerns.
What many of these people fail to realize is that these steps might actually be hurting their ability to recover from these issues. If the problems persist, they may lose some of the potential options that could be available, and they may need to file for bankruptcy. And if bankruptcy is necessary, some of the decisions that they made prior to filing may actually cause them significant harm throughout the process.
It is important that people are aware of what will assets and debts will be subject to the bankruptcy. Retirement accounts will generally be excluded from the process, unless individuals withdraw funds from these accounts to pay bills. Depending upon the type of bankruptcy that is filed, other assets may also be kept out of the bankruptcy proceedings, so people should be sure that they are completely informed before taking any drastic steps.
Debtors also need to know that it is possible that not all debts will be eliminated by the bankruptcy. While the process will eliminate most credit card debts or medical expenses, it will not help with student loan bills or past-due taxes. However, those that file will be able to create a plan that could help them deal with the debts that still remain afterward.
As part of the bankruptcy, the trustee will review the debtor’s complete financial transaction history prior to the bankruptcy filing. This is done to ensure that the debtor did not try to hide or conceal assets before he or she started the process. If irregularities are discovered, the trustee may pursue recovery of these funds from the parties that received them.
If you find yourself experiencing financial trouble, do not be afraid to seek help. A knowledgeable bankruptcy attorney can explain all of your potential options to you, which will allow you to gain a full understanding of the things that you can do to protect your assets at this time.
Every person’s financial situation is different. Because of this, you need to be sure that you work with someone who can create a plan that helps you protect the items most important to you. This will help ensure that you are able to create a more sound financial future.