Wednesday, December 28, 2016, AM | Leave Comment
Bankruptcy is one of the most profound steps an individual or a business can take.
Done properly, it can provide a welcome respite from creditors and difficult circumstances.
Done improperly, it can lead to all kinds of expense, hassle and wasted time.
The steps necessary to file a successful bankruptcy are rather consistent across most cases. So what should you do if you are planning to take such a step?
It goes without saying you’ll need an attorney to prepare your bankruptcy, but you should not overlook the fact you’re also going to need an accountant.
Depending on the complexity of your finances and the legal requirements of the statements you’ll need to file, having someone on hand who knows how to prepare various kinds of financial documents is not a luxury.
Even if there is additional expense involved, the time and money saved by getting things right the first time will far outweigh any potential burden during the case.
Your accountant will likely advise you as to the importance of having a complete record of tax filings to include with your initial series of documents.
Tax returns are recognized by most courts as reliable evidence of your financial activity.
Leaving aside the convenience of having such records, the returns will give you and your accountant a good baseline to compare your other financial activities and to satisfy the disclosure requirements of the particular kind of bankruptcy you pursue.
If you have already decided to file, you may find your creditors are far more conciliatory and agreeable about settlements of your debts.
Firms like Demers Gagnier Inc. may advise you to get as many of them on board as you can before you file as it will be easier to move the case to a resolution.
If you can get a consensus among all your creditors, you may have the option to file a “pre-packaged” case, which only requires a judge’s approval before judgment is entered.
Depending on your particular circumstances, you may find there are various loan options open to you in the form of “debtor-in-possession” financing.
The reason these loans are popular with banks and financial institutions is because they are first in line to be repaid from your assets.
They are also often necessary if your case is likely to take more than the standard amount of time.
In any legal action, preparation is everything. As many lawyers will attest, the more papers you can wave in the air in the courtroom, the better chance you have of prevailing.
Make sure you prepare those papers in advance and you’ll have a much better chance of success.
Meghan Belnap is a freelance writer who enjoys spending time with her family. She also enjoys being in the outdoors and exploring new opportunities whenever they arise. Meghan also enjoys researching new topics that help to expand her horizons. You can often find her buried in a good book or out looking for an adventure. You can connect with her on Facebook and Twitter.