Garcia & Gonzales, P.C. June 26, 2016

When bankruptcy is your best option for resolving major debt issues, what you do in the planning phase – before you file your bankruptcy petition – can be critical to how smoothly your future case proceeds. It could also impact how your case ends up being resolved and how much money and time you have to spend to reach that resolution.

To help people understand how to position their future bankruptcy case for success, the following are some of the most important steps to take during the planning stage:

  1. Take the bankruptcy means test – The bankruptcy means test is a complex evaluation tool used to determine whether people qualify for Chapter 7 bankruptcy. If you are considering filing for Chapter 7 bankruptcy, you must take the means test before you file – otherwise your petition will be dismissed, and you will have to wait at least 180 days before you can refile. For those who are facing serious debt, that waiting period could give creditors sufficient time to pursue wage garnishments, repossessions or even lawsuits against you.

  2. Continue to file your income taxes – Even if you can’t pay your taxes, you have to keep filing income tax returns with the federal and state governments. One of the reasons that this is so important is that your tax returns are one of the primary ways that the bankruptcy court will confirm your income. So if you haven’t been filing them for a year or more prior to filing for bankruptcy, again, the court will likely reject/dismiss your petition until you do follow through with these filings (so your income can be officially verified).

  3. Gather your financial documents – Start to compile the paperwork related to your debt, as well as your assets. While some of these documents may be an essential part of your initial filing, they will all be necessary later when it’s time for the court to assess your bankruptcy estate versus your debt. Some of the documents to gather can include (and may not be limited to):

    • Debt-related documents, such as loan documents, credit card bills, letters from creditors, etc.

    • Asset-related documents, such as bank account statements, titles or deeds to property, paperwork related to any benefits you may be receiving, etc.

    • Income-related documents, such as pay stubs, income tax returns, etc.

  4. Do NOT go on a spending spree or try to giveaway your assets – Either of these actions could land you in trouble with the bankruptcy court, as they can be considered to be bankruptcy fraud. So, if you know you are going to be filing for bankruptcy, do not change your spending habits and do not try to transfer assets out of your name. It may lead to a denial of your bankruptcy petition, as well as criminal charges (of fraud)

  5. Complete the credit counseling requirement – This requirement has to be satisfied by anyone filing for bankruptcy in order for the court to accept the petition. So be sure to attend credit counseling prior to filing in order to avoid additional delays in your case.

  6. Meet with a lawyer – An attorney can help you identify any other steps you may need to take before filing for bankruptcy in order to protect yourself and position your case for the best possible outcomes.

Contact a Denver Bankruptcy Attorney at Garcia & Gonzales, P.C.

When you are looking for real relief from serious debt, you can trust the Denver bankruptcy attorney at Garcia & Gonzales, P.C. to provide you with experienced help and honest answers about your best debt relief options. With more than 50 years of combined legal experience, our trusted lawyers have the legal knowledge, skills and insight you can rely on to help you favorably resolve your debt issues and obtain a financial fresh start.

Contact us today by calling or by emailing us using the contact form at the bottom of this page to learn more about your best debt relief options, as well as how we can help you.

When you contact us, you will communicate directly with one of our attorneys, not a paralegal or legal assistant. We welcome Spanish-speaking individuals to contact us also – hablamos Español.