Chapter 7 bankruptcy is designed to give people who are buried in debt a chance to dig themselves out of the hole and get a fresh start. There are some steps you can take prior to filing your petition that may help you avoid pitfalls and get the most benefit from the bankruptcy process.
Be sure all of your tax returns are filed. Your previous two years of tax returns must be filed and copies submitted no later than the date scheduled for the meeting of creditors. The trustee may ask for more information about your taxes and your tax returns.
Get copies of your credit reports. If you fail to include a debt in your bankruptcy petition, it will not be discharged even if it is a dischargeable debt. Your credit reports may include debts you forgot about.
Gather together relevant information for filling out Schedules. Along with the basic bankruptcy petition that you submit, you have to fill out Schedules that ask for detailed information about your financial situation. If you, at a minimum, assimilate the following information, it will simplify the process of filing out the forms.
- Account information for all your creditors, including name of the creditor and the account number.
- All checking and savings account numbers and names of the banks where the accounts are held.
- Documents confirming ownership in assets like your home and car.
- An itemization of all your monthly expenses.
Quit using your credit cards. Do not make a big purchase or cash withdrawal from your credit cards near the date of your filing. The purchase or withdrawal may be deemed fraudulent if a creditor claims you knew you were going to be filing for bankruptcy and had no intention of repaying the debt at the time it was incurred.