Recently on our bankruptcy forum a user asked, “I am in a financial crisis. My spouse has divorced me, I need to find a job, and I am suffering from a severe medical condition. I have not worked in years, and I am scared. Additionally, I have over $50,000 in medical debts. I am thinking that my only option might be to file Chapter 7 bankruptcy. Do you have any bankruptcy tips for me or things I need to consider before I file?”
Bankruptcy tips before filing your Chapter 7 bankruptcy petition
No matter what type of bankruptcy you decide to file it’s very important to understand the process and what bankruptcy will and will not do for you. Let’s discuss some of the most important bankruptcy tips prior to filing your bankruptcy petition.
- Consider whether bankruptcy is the right choice.
Filing bankruptcy is a very important decision, one which should not be made without first considering if it’s the right option. If there is any way you can repay your debts that is generally the best option. You can talk to a bankruptcy lawyer about your options but make sure you find someone who does not simply want your money but who will give you an honest opinion about your options.
- File the right bankruptcy.
Next, if you do decide to file for bankruptcy protection you will want to determine whether to file Chapter 7 or Chapter 13. If you have few assets and limited income Chapter 7 is most likely the best option for you. If you have a high income or assets you wish to protect, however, consider filing Chapter 13 bankruptcy.
- Be honest in all your bankruptcy filings.
No matter whether you choose Chapter 7 or Chapter 13 bankruptcy you will want to make sure that you fill out the schedules accurately and completely. Do not try to hide any of your income, expenses, assets, or liabilities. Remember, if you intentionally do not disclose all of your financial information not only can your case be dismissed, you could be charged with a criminal offense. Additionally, any debts you fail to list may not be discharged.
- Take all the right steps before you file bankruptcy.
Before you file bankruptcy there are a few steps you should take: assess your financial situation, create a budget, request copies of your credit reports, notify all of your creditors and debtors, take your credit counseling course, and discuss your case with a bankruptcy lawyer.
- Talk to your lawyer about what debts the bankruptcy will not discharge.
Now, you mentioned that you had $50,000 in medical debts. If you file Chapter 7 bankruptcy there’s a strong possibility this debt will be discharged. If you have other debts, such as child support, fraudulent debts, student loan debt, personal injury settlements, or recent tax debts, however, that debt will not be discharged by filing for bankruptcy protection. Bankruptcy will also not discharge secured debts.
Filing bankruptcy may be your best option, but before you decide make sure you follow the bankruptcy tips outlined above.
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