Financing the Bankruptcy Process with Your Tax Refund and Other Preparatory Steps

One of the largest obstacles that people face in filing for bankruptcy is deciding how to pay for the process. Many people argue that it is a Catch 22: If they were able to come up with several hundred or even a thousand dollars, they would not need to file for bankruptcy in the first place. In the last few years, numerous articles have been published about people paying for the bankruptcy process through the use of their tax refunds. The lesson to be gleaned from these articles is that there are numerous ways to pay for the bankruptcy process even if you cannot immediately think of one. Obtaining sufficient financial resources for the bankruptcy process is just one of the many complications for which a person who is interested in filing for bankruptcy must prepare. This article will review some of the important steps that should be performed in preparation of filing for bankruptcy.

Stop Borrowing Money

After you decide to file for bankruptcy, it is important to immediately stop borrowing money or using any credit cards. If you continue to do so, there is a risk that this might be construed as fraud and will result in additional penalties, including prison. You should also avoid borrowing any money from family members because you will be required to list these individuals as creditors during the bankruptcy process.

Make Sure You Have an Emotional Support Network

The bankruptcy process tends to be a difficult time. One of the best ways to avoid the depression and anxiety that usually accompanies this process is to confide in a friend or two. Having the support of loved ones can help significantly in getting through the process in one piece. It can also help to always remember that there is not anything shameful about the bankruptcy process and that other people have made similar mistakes.

Stop Paying Bills

Before filing for bankruptcy, you will likely want to stop making payments on any unsecured loans. You will, however, likely need to continue to pay mortgage, rent, utility bills and other secured payments. While many people worry about how discontinuing these payments affects their credit score, it is important to realize that while your rating will be temporarily affected, after bankruptcy the rating will improve again.

Learn How to Live Simply

The bankruptcy process will mean that you will be required to live without luxury. You will also be required to live on a cash basis. Additionally, learning how to live simply can help you prepare for your second chance at building a good credit history after the bankruptcy process has concluded.

Obtain the Services of an Experienced Bankruptcy Attorney

If you are going through the bankruptcy process, you likely need the assistance of a skilled attorney. Contact experienced experienced bankruptcy attorney Jim A Lyon today for assistance with your case.