Bankruptcy provides the benefit of allowing you to walk away from a huge amount of debt and other obligations that you cannot afford. You are set free from debt so that you can get a fresh start and rebuild your life. W.C. Fields once said, “There ain’t no such thing as a free lunch” and he was right. Here are a few things to keep in mind when you file your bankruptcy:
1. Don’t expect your lawyer to do all the work. You have to provide certain documents and other information to your lawyer so that they can accurately and adequately fill out all of your forms, schedules and statements. Bankrupcty is a collaborative effort – that means that you have to participate.
2. Make sure that your income tax returns are filed. When you file bankruptcy, you are required to file your income tax returns that are due as of the date of your filing. The bankruptcy system requires your cooperation in getting your tax returns filed.
3. Don’t hide things from your lawyer. Bankruptcy is a process of full disclosure – that means that you are required to provide your lawyer with documentation relating to all of your assets, debts and other obligations. Don’t try to hide a payment to a creditor or a transfer of an asset. Just tell the truth. Don’t wait until the burden of guilt keeps you awake all night to call your lawyer at 6 am in the morning to come clean., Be up front and be honest.
4. Don’t expect that there won’t be any consequences. Back to the “no free lunch” thing. The bankruptcy laws allow you to get relief from unbearable debts – don’t expect this to come with no “cost” on your end. Please don’t whine when your home mortgage lender or auto lender does not report your payments to the 3 major credit reporting agencies. Don’t get indignant when your “on time” payments are not reported – you make have to make an extra effort in assembling your receipts from making your payments and submit them pursuant to the Fair Credit Reporting Act. Don’t expect your lawyer to do all the heavy lifting.
5. Open your mail – and READ IT! I am not surprised when clients first come in and bring in a pile of unopened envelopes of statements and bills and collection notices. Quite frankly – it does surprise me when they tell me that everything has been thrown away. Regardless – those practices have to stop when you get serious about getting a grip on your finances and decide that bankruptcy is the right option for you – you have to start opening your mail – especially all of your mail from your lawyer and notices from the US Bankruptcy Court. Please open this mail and if you don’t understand it call your lawyer. In this day – you can easily scan, fax or snap a picture of any document that you receive and don’t understand.