Initiating bankruptcy is more complex than simply filling out and filing a bankruptcy petition with the Kentucky bankruptcy court. Rather, it requires careful planning and consideration. So without the need for further introduction, please continue reading to learn what actions are necessary to prepare for a bankruptcy filing and how an experienced Louisville, Kentucky consumer bankruptcy lawyer at Schwartz Bankruptcy Law Center can help you make the right moves.

What actions do I need to take to prepare for a bankruptcy filing?

Arguably most importantly, you must coordinate a credit counseling course before even considering preparing your bankruptcy petition. Specifically, this course must be taken with a trusted counselor at an agency approved by the United States Department of Justice. You must finish this course within 180 of your official bankruptcy filing, and proof of this timeline is established by supplementing the petition with your certificate of completion.

Secondly, you may do yourself a favor by beginning to gather all relevant financial documents and records. This is because sooner rather than later, your assigned bankruptcy trustee will ask for this evidence, so to accurately establish your current assets and debts. Examples of such documents and records include your most recent bank statements from your accounts, bills from your creditors, pay stubs from your employer, and previously filed income tax returns, among other things.

Lastly, you should ensure that you have sufficient cash on hand to cover the mandatory filing fee associated with your bankruptcy petition. As of 2022, in the state of Kentucky, this filing fee is $338 or $313 for Chapter 7 or 13 bankruptcy, respectively. If you do not believe that you can reasonably afford this at this time, you may later petition to pay the fee in installments or waive the fee. Of course, this may make your initial bankruptcy filing all the more complicated.

What alternatives should I consider before filing for bankruptcy?

You should look at your credit counseling course less as a formality and more as an opportunity to curb bankruptcy proceedings altogether. That is, after reviewing your current assets and debts, your assigned counselor may encourage you to resolve your financial crisis through manageable, alternative bankruptcy options. Examples of such alternatives they may recommend to you are as follows:

  • You may combine multiple debts into a single loan with potentially lower interest rates.
  • You may negotiate lower interest rates or extended repayment periods with your creditors.
  • You may settle to pay a portion of your debts to your creditors rather than the full amount.
  • You may sell luxury items to earn funds that can pay off your outstanding debts.
  • You may create a monthly budget that frees up funds to pay off your outstanding debts.

If you have any outstanding questions yet to be answered, please ask a skilled Louisville, Kentucky consumer bankruptcy lawyer. Anyone at Schwartz Bankruptcy Law Center is willing and able to offer the support you need.