Bankruptcy is a legal process where people who cannot clear their debts to creditors seek help from some of their obligations. Most businesses have found themselves at the heart of financial hardship, especially after the recent pandemic.
Dealing with your creditor’s intimidations and calls can be frightening, and this explains why most people struggling with debt opt to file for bankruptcy. However, you should know that bankruptcy is a legal process and have the right team to ensure it runs smoothly.
Filing for bankruptcy is challenging, but it is the best way businesses can return their finances on track. As with other significant decisions, this process requires careful planning, preparation, and thought.
Many professionals help entrepreneurs dissolve a business, and you should contact them for the best results. Below we discuss the importance of preparing for bankruptcy and how Goodbye Startup can help.
How to Make Bankruptcy Filing Easier
Below we discuss how to prepare for bankruptcy;
1. Do Not Incur Further Debt
The authorities will go back at least two months to ensure you do not incur further debt before giving you the necessary documents. However, you are advised to keep a record if you must use credit for food and gas.
Remember, a bankruptcy stays in your credit report for a long time, meaning you will only be eligible for low-limit credit cards during the first months. However, your credit score will rise as you rebuild it with time.
2. Ensure You Fill In The Necessary Tax Returns
Your penalties and income tax arrears can only be discharged in bankruptcy under limited circumstances. Also, all refunds depend on your received income before the bankruptcy heads back to the estate.
Individuals who have not filed their taxes within the previous two years before filing for bankruptcy can have issues with their case.
3. Pay Your Bills
Most domestic payments like alimony and child support are not included in a bankruptcy, meaning you should proceed with paying them. Individuals must also keep paying insurance premiums, primarily if their lenders need them.
Also, people who wish to keep their car and home cannot discharge these bankruptcy debts because they are secured. Kindly consider contacting an expert to inform you how to close a business in Missouri.
4. Halt Automatic Payments
Most people’s bills are automatically deducted from their accounts for convenience. It is advisable to stop automatic payments when preparing for your bankruptcy filing and take charge of what you control.
The best way to achieve this is by contacting a bankruptcy lawyer.
5. File Your Debt Information Thoroughly And Honestly
Individuals must disclose all their assets under the penalty of perjury, among; income, debts, and expenses. Failure to do this means the debt will not be included in your bankruptcy, and you will continue to owe it. Contact us for more information on how to dissolve an LLC in Wisconsin.
Preparing for bankruptcy has many benefits; the above article has elaborated on how to achieve that. Reach out to us to learn about Goodbye Startup.