After going over your finances, you may have decided that you would like to proceed with going through bankruptcy. However, it can be easy to become overwhelmed and stumped after making that powerful decision. This ultimately is not a decision made lightly.
To successfully file for bankruptcy, you must go through careful planning and understand the steps involved. To help guide you through your journey to a better financial future, here are the first steps you should take when moving toward bankruptcy.
Steps to take for Bankruptcy
Understand the Different Types of Bankruptcy
Did you know that there is more than one type of bankruptcy? Not only are there different types of bankruptcy for individuals vs businesses, but there are, in fact, two different types of bankruptcy for individuals alone.
Chapter 7 Bankruptcy: This is the most common type of bankruptcy for individuals; it’s also known as liquidation bankruptcy. From 2019 to 2023, 261,277 Americans filed for Chapter 7. In this form of bankruptcy, individuals can completely discharge applicable debts in part by having their non-exempt assets sold. It is typically suited for those with limited income and no means to repay their debts.
Chapter 13 Bankruptcy: Also commonly referred to as wage earner’s plan. This form of bankruptcy is slightly less common, however 183,956 people filed for it from 2019 to 2023. When filing for Chapter 13, individuals can repay their debts within three to five years utilizing a manageable agreed-upon plan. It is ideal for those with a steady stream of income who want to catch up on missed payments.
Knowing which type of bankruptcy applies to your situation is essential to proceeding effectively.
Gather Required Financial Documents
Documentation is a major part of filing for bankruptcy. The documentation is necessary to assess your eligibility for bankruptcy and evaluate your financial history. To prepare for a more seamless bankruptcy journey, you will need to gather the following documents before starting the process.
- Recent pay stubs or proof of income.
- Tax returns from the past two years.
- Bank statements.
- Credit card and loan statements.
- A list of all your assets, including property, vehicles, and valuables.
Having these documents ready will streamline the filing process and reduce potential delays.
Consult with a Bankruptcy Lawyer
It’s no secret that bankruptcy law can be complex, and small mistakes in the filing process can lead to delays, dismissals, or even denial of your case. For this reason, consulting with an experienced bankruptcy lawyer is highly recommended.
A qualified lawyer will:
- Help you determine the best type of bankruptcy for your individual situation.
- Ensure all legally required documents are prepared and filed correctly.
- Remove stress by representing you in court and communicating with creditors on your behalf.
More importantly, an experienced lawyer can help protect your rights and assets during the bankruptcy process, ensuring you achieve the best possible outcome.
Find a Bankruptcy Lawyer in Maryland
If you are ready to file for bankruptcy, you need a lawyer you can trust to help you seamlessly navigate the legal complexities. If you are searching for a bankruptcy lawyer in Maryland, look no further than Adam M. Freiman.
Adam has over 25 years of law experience, handling a wide variety of cases, from bankruptcy to large-scale criminal cases. He was also the founder of one of the most successful bankruptcy law firms in Baltimore. He now owns his own firm, where he personally represents every one of his clients.
To learn more about how Adam can help you with your bankruptcy case, contact our office today!
