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Bankruptcy court, step one: analysis

| Nov 11, 2020 | Chapter 13

Your success in bankruptcy would depend on many things. Commitment, financial management skills, effective planning and taking full advantage of all available exemptions, to name a few.

However, one of your first steps will probably be analyzing your financial situation. Here are some potential benefits of paying special attention to this stage.

Reorganizing debt

Admitting that you owe too much money is one thing. Figuring out how you might turn the problem to your advantage is another thing entirely.

If you are like most people struggling with unmanageable debt, you might have to backtrack once you choose to file for bankruptcy. Reorganizing what you owe could reveal options for pre-bankruptcy payments, asset protection strategies and so on.

Getting a clear picture

Even if you do not discover any opportunities while analyzing your assets and liabilities, simply taking stock is valuable in and of itself. For simpler filings, the information should help you efficiently outline what you want to keep, or how you want to manage your repayment plan. For more complex situations, analysis should lay the groundwork for the development of your plan to recover your financial viability.

Informing your decision

In some cases, an in-depth look at your situation might reveal that you do not need bankruptcy at all. The data you collect could also indicate the chapter under which it would be most advantageous for you to file.

Overall, the main benefit of a comprehensive first look is to customize your filing. No two situations are alike, and you will likely benefit from adapting what you do to fit your unique finances.

FindLaw Network