Declaring bankruptcy may seem like a troubling and stressful process and it can be for people that aren’t well prepared on the specifics. With adequate preparation and knowledge, you can navigate this process smoothly and come out on the other end debt-free. Here are a few tips to make the insolvency process easier and simpler and avoid any discrepancies that will cost you time and effort later.
- Create A Personal Stop Loss Order
If you have incurred significantly damaging debt in a short period of time, it usually points towards very inadvisable financial habits such as regularly amounting debt on several credit cards. The first step to taking back control of your finances is to dry up your buying habits immediately and cut up all your credit cards. Stop all credit card use at least 3 months before filing for bankruptcy and depend only on debit card use. If you do not stop using your credit cards, the court may use this pointer in the bankruptcy case against you later down the line.
- Say No To Auto-Drafting
Many of your bills such as utilities or mortgage payments may have been auto-drafted for a long time instead of being manually paid each month. This is a poor financial habit because over time it makes you unaware of where your disposable income is going. Pay your bills one by one paying attention to each and turning off all automatic features.
Furthermore, know that any asset you stop paying for such as your house mortgage payment or installments for a new piece of equipment will not be cleared out for you when you declare bankruptcy which means you will lose your home and any such assets that were not regularly paid for. If possible borrow a sum of money from friends or family to keep up your current payments to stop you from losing major assets until you have declared bankruptcy Montreal officially.
- Stop Any Asset Transfer/Sale
When you file for bankruptcy and there is a subsequent court hearing regarding the specifics, you need to be able to show you weren’t disposing of or selling property in the months before you filed. You also need to steer clear of any suspicious activity such as transferring known current assets to a relative or friend to stop them from being seized or sold by a Bankruptcy Trustee. Avoid asset transfer as early as 2 years before declaring bankruptcy.
- Compile And Disclose
Make a list of all your assets and their state (this applies particularly to assets that you do not entirely own and are still making payments for) and disclose them in full to a trustee. Do not hide any assets and have all the paperwork and documents ready to go for each to reduce processing lag. Check credit reports to ascertain your main expenses and areas where you have been reckless such as excessive shopping. You want to be well-versed in the financial mistakes that have gotten your debt to such a point. Mandatory financial counseling is also helpful in regaining control of your life at this juncture.