When you first realize that you may need to consider bankruptcy in NYC, there are a lot of things that you’ll need to do. From the very start, you’ll probably be feeling a mixture of relief at having chosen a path, and apprehension at the work ahead. So here are five things you can do right away that will make the entire process easier.
1. Stop making big payments or transfers of property, cash, or anything of any value.
One of the first things that is examined by the court when determining if your debts can be excused is how you’ve spent your money or used your assets lately. Large transfers can look suspicious – as if you were attempting to avoid having assets seized. Additionally, it’s important to seek an attorney’s advice on continuing to pay any creditors while you work up to filing for bankruptcy. In many, if not most, cases, it is better to stop paying all of your unsecured creditors, rather than to continue to pay some but not others.
It’s also important to stop using credit cards until your bankruptcy has been determined, and stop borrowing money of any sort. Once you know you intend to file for bankruptcy, any further racking up of debt could be considered fraud. This does include borrowing money from family, because any personal loans – even a few bucks here and there – must be reported in a bankruptcy filing. If your family or friends want to help you out, be sure that it’s with the understanding that the money is a gift.
On this note, be sure to cancel any automatic payments you may have set up, or any automatic transfers to savings accounts as well. Anything that moves money around too much should stop until after the bankruptcy.
2. Talk to an attorney as soon as possible.
Bankruptcy in NYC can be a complex matter that can result in felony charges if filed incorrectly or fraudulently. With such high stakes on the line, it is essential that you seek out an experienced bankruptcy lawyer to assist with the filing. Your lawyer can also do much more than help you file; they can help you stop harassment from creditors, find exemptions to protect your assets, and ensure that all legal requirements are met.
For example, did you know that it is a requirement that all bankruptcy filers go through credit counseling before they file? The counseling must be received at a DOJ-approved facility, as well. Your lawyer will ensure that you take care of all the requirements so that your bankruptcy filing goes as smoothly as possible.
3. Start planning for the future.
The bankruptcy isn’t going to last forever. While the record of the bankruptcy stays with you for a while, that doesn’t mean that you can’t immediately begin working towards better credit and a more secure financial situation. Depending on what type of bankruptcy you filed for, you may either be nearly or totally debt free, or you may have a monthly payment to a trustee for your debts. In either case, consider opening a savings account if you don’t have one already, and begin building a nest egg that you can rely on in the future. You may also want to consider a secured credit card to help build your credit after the discharge. And now is definitely the time to budget strictly and stick to it to ensure you aren’t facing another bankruptcy in the future.
Have more questions on how you can prepare for a bankruptcy? Call my office at 212-244-2882 to learn more.