For those facing a financial crisis, making the decision to file for bankruptcy can be extremely difficult and confusing, especially in light of the many myths associated with pursuing such an action.  In other words, people often hesitate to file due to a significant amount of uncertainty as to whether it will forever ruin their credit reports or affect their ability to purchase a home in the future.  However, it is important to consider that if you are drowning in debt, filing for bankruptcy may be your best and only option.  Thousands of people in Kansas, thinking that bankruptcy is not a plausible alternative to address their mounting debt situations, make fatal mistakes that could have been avoided had they immediately taken proactive measures. For example, sometimes people will raid their retirement accounts or pursue other impulsive means in order to pay down their debts.  Yet had they initially met with a qualified bankruptcy attorney, they would have learned that these actions may not have been necessary.  

When a person is ready to consider bankruptcy as a way to wipe their financial slate clean, there are a number of steps that he or she should take before going ahead and filing their case.  In essence, by taking the following steps, a debtor can maximize their chances of being able to successfully discharge their debts and start anew:

  1. Keep a log of all of your monthly expenses.  In order to file for a Kansas City bankruptcy action, you need to create an accurate list of all of your monthly expenses, including your housing costs, medical bills, car payments, food costs and more.   This step is vital given the total amount of your expenses dictate (i) what type of bankruptcy you are eligible to file, and (ii) how much your payments will be should you decide to file a Chapter 13 action.  In the event that you fail to account for all of your expenses, it could prevent you from availing yourself of the bankruptcy action best suited to address your individual debt situation.
  1. Know what not to do before filing for bankruptcy.   Under the U.S. Bankruptcy Code, there are certain actions you should avoid pursuing in the months prior to filing your case.  The main reason behind this is that some actions may be considered by the law as “fraudulent”, leading to the potential dismissal of your case and the inability to discharge your debts.  These include:
  • Hiding one’s property/assets
  • Failing to honestly disclose one’s finances (including income, profits, etc.)
  • Damaging property that may be surrendered to creditors
  • Transferring or selling assets to family, friends and others for the purposes of concealment
  • Making very large and unnecessary purchases using credit cards prior to filing
  • Gifting away property to friends or family that would otherwise be subject to creditor repossession
  1. Attending the mandatory credit counseling class before filing for bankruptcy.  All debtors considering bankruptcy must take a mandatory credit counseling course prior to filing their case.   A bankruptcy court will not allow you to submit your petition and other necessary documentation until they receive your certificate of completion.  Most credit counseling companies will electronically submit it to you and your attorney so that said certificate is included along with all of the information necessary to successfully file your case.
  1. Consult with a qualified Kansas City bankruptcy attorney.  Only an experienced bankruptcy attorney can fully advise you of all of your financial options and help you decide what course of action is right for you.   By working with a seasoned attorney, you decrease the likelihood of making mistakes that may cost you the ability to discharge most, if not all of your debts.  

Contact me for a free, confidential initial consultation.

If you or a loved one is thinking about pursuing a Kansas City bankruptcy action, feel free to contact me at 913-742-8700.  I offer a completely confidential initial consultation, and, at no cost to you.  I will devote the time necessary to explore your financial situation in complete confidence.  After an individualized evaluation, I will advise you on your options and best course of action to take to address your financial situation.