Here is a list of the top 5 things you should do prior to filing for Bankruptcy.

1. Be truthful with your attorney.

The relationship you have with your attorney is of a confidential nature. You do not have to worry about your attorney “ratting” you out. Because of this unique confidential relationship, it is very important that you truthfully answer all questions. You must be honest even if an answer seems to “hurt” you. It may be that the law is on your side and you will not suffer any harm. In short, BE TRUTHFUL. Likewise, no attorney at Brock and Stout will ever ask you to be dishonest.

2. File all tax returns including any that are past due.

Before filing for bankruptcy relief, you must file all tax returns. Even if you are late in filing or if you owe money, you must file your tax returns. The bankruptcy law requires that you file all tax returns. In fact, we have to include copies of your tax returns when we file your bankruptcy case. Otherwise, you case will be dismissed.

Often times, when a person is financially strapped, they will not file their tax return because they do not have the money to pay the IRS or the Alabama Department of Revenue. Despite owing money, it is very important that you file all tax returns. You will not get in trouble if you file your tax return but do not pay the taxes at the time of filing the return. It is far worse and much more complicated when you do not file all of your tax returns. In short, you must file all tax returns.

3. Provide accurate records of your income.

Bankruptcy requires that you provide proof of your current income. Proof of income typically consists of the last six months of pay stubs or payment advises. Some companies provide online access to your pay records or can provide you a printout of your last six months of pay records. Pay records are mandatory and also allow the attorney to determine the type of bankruptcy for which you are eligible. In short, tell us about all of your income from all sources.

4. Disclose All Debt

The United States Constitution states that no person may be deprived of property without due process. This Constitutional mandate applies to bankruptcy law. If you owe a debt, no matter how small, bankruptcy may deprive the person or business of payments (property). Think of it this way. Bankruptcy is such a powerful law that it will relieve you of all or a large part of your debt. However, to be fair, you must tell your creditors about the bankruptcy. The act of notifying all of your creditors about your bankruptcy satisfies Constitutional Due Process. In short, you have to disclose all debt.

5. Disclose All transfers of property

Sometimes a person who is contemplating bankruptcy might be fearful that they will lose everything they own. To the contrary, all states have some form of exemption statutes that allow you to protect certain types of property in bankruptcy. However, if you transfer the property out of your name, you could lose the protection you may have otherwise gotten from the exemption statutes. It is never a good idea to transfer property out of your name prior to bankruptcy or, for that matter, prior to meeting with a bankruptcy attorney. Instead, keep all of your assets in place and tell your attorney about everything you own. Then, you and the attorney, can plot out the best strategy for you. In short, seek legal advice prior to transferring anything out of your name before you file for bankruptcy.