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Preparing to Declare Bankruptcy in Illinois

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Preparing to Declare Bankruptcy in Illinois

Written by Charles Newland on . Posted in Bankruptcy

A couple are calculating, bankruptcyThorough planning and preparation are required when filing for bankruptcy. Individuals preparing to file bankruptcy must complete several steps in order to ensure that best outcome of the proceedings. A bankruptcy lawyer can help prepare the necessary documentation that shows the financial position of the individual and their inability to pay the debts they owe.

One of the first things that must be shown is the individual’s tax and income history. This means compiling copies of the individual’s 1040’s, W-2’s, and other tax filings. These documents show an individual’s earned income which will be considered by the court to determine their ability to satisfy their debts. These records should cover at least the previous two years of filings.

Another step that is highly advisable is to review an individual’s credit reports from TransUnion, Experian, and Equifax. Individuals may request a free copy of these reports once per year. Reviewing these is essential as it shows a full and complete picture of an individual’s debts and their payment history. This establishes a baseline for individuals to show how much they owe, and to whom the funds are owed to.

In addition to credit reports, it is essential to compile a list of all assets and liabilities. These can include income from a job, a spouse’s income, real property, investment accounts, etc. An individual’s bankruptcy lawyer can compile this list, as well as a list of monthly obligations including rent, mortgage payments, utilities, etc. The more detailed and thorough these lists, the easier it is to show that an individual’s current financial situation makes it impossible to satisfy their debt obligations.

When preparing to file bankruptcy, it is necessary to show statements from creditor’s showing payment history, as well as any attempts at reconciling the debt. This can include documentation showing any attempts to renegotiate payment amounts, lower interest rates, etc. The bankruptcy court will review these documents as prepared by an individual’s bankruptcy lawyer when they consider whether the debtor has made a reasonable effort to satisfy their debts before filing for bankruptcy.

Finally, it is crucial to complete pre-bankruptcy credit counseling prior to filing. Individuals filing for bankruptcy are required to complete this counseling and it is best to begin this process as soon as possible. This counseling includes information on what individuals can expect in the process, as well as steps they can take to get their finances back on track. With bankruptcy filings increasing nationwide, this is a step that can’t be overemphasized.

 

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