Find a bankruptcy lawyer who can help you
Bankruptcy law in the United States is highly complex, especially for businesses. While do-it-yourself bankruptcy is manageable and can save you money if your situation is not very complicated, it is highly recommended that you retain the services of a bankruptcy attorney if you have no choice but to declare.
The bankruptcy laws that are most commonly applied to individuals and small businesses are contained in Chapters 7, 11 and 13 of the United States Code. Of these laws, Chapter 11 applies to businesses and Chapter 13 applies to private individuals. The Chapter 7 laws are reserved for cases where the debtor has no assets to offer creditors.
Should I Declare Bankruptcy?
In all but the most extreme cases, bankruptcy is but one of several options at your disposal. Before you explore bankruptcy, you should try reaching debt settlements with your creditors or consult debt consolidation services to see if they can help.
If you've looked into these options, yet you're still saddled with an overwhelming amount of debt that you cannot possibly see a way to pay, then it might be time to consult a bankruptcy lawyer. The bottom line is that you should consider bankruptcy an absolute last resort, not an easy way out.
Preparing to Declare Bankruptcy
If you've decided to declare bankruptcy, there are things you should and should not do. First, you should visit a bankruptcy attorney. Lawyers have the necessary bankruptcy forms you'll need to fill out, review and sign prior to your filing. You need to understand your rights as well as your obligations before you proceed with the process.
You should not:
- Leave a credit card off your bankruptcy forms when filing so you can "save" it for afterwards
- Take out any loans, either from financial institutions or from private individuals
- Omit money owed to family members when telling your bankruptcy lawyer about your debts
- Write checks you have no intention of honoring
- Run up your credit cards before making your filing
- Omit any bank or credit union accounts from your filing
In addition, you should not file if your annual income exceeds the total amount of your annual expenses. This is frowned upon, so you'll have to be less-than-honest in your bankruptcy forms to get court approval. This is not only dishonest but may also be illegal, and you don't want to end up in an even worse situation than the one you're already in.