A big part of the bankruptcy protection granted to filers is the automatic stay, which is an injunction that allows the debtor to keep his or her assets safe from the debt collection efforts of creditors and collection agencies. If you want to file a bankruptcy petition, there are steps you can take immediately before and after filing for bankruptcy to prepare your financial situation for the bankruptcy process.
Protecting Bank Account Funds
Before filing for personal bankruptcy, try to pay your necessary bills from your bank account. The lower the amount in your account, the lower the amount that your bankruptcy trustee can use from it. In bankruptcies, the trustees are allowed to take funds from the debtors’ bank accounts that are nonexempt. Keep in mind, however, that when it comes to bankruptcy exemptions, bank accounts are usually considered non-exempt assets and when they are exempted, the coverage isn’t that significant anyway.
Take note as well that a bank might freeze an account if it learns that the account holder is in the process of filing bankruptcy. If your bank freezes your account, you can request that your trustee contact the bank to have the freeze lifted so that your account can be accessed.
Minding Set Offs
If you signed up for a loan or a credit card through a bank at which you have an account, the bank may have a right to set-off, allowing it to take funds from your account to pay back your loan or credit card debt. You should make sure that your loans and credit card debts are not with banks at which you have accounts with funds if you’re considering filing for bankruptcy.
Another consideration is if you have a security deposit with a utility company, such as gas and electricity. When you file for bankruptcy, it may use your deposit to set off what you owe it. A good course of action for you to take is to delay declaring bankruptcy until after you’ve caught up with your payments so you won’t have to give a new deposit. Another one is to add more funds to your deposit before your bankruptcy filing. Remember that a utility company cannot halt providing you its services for non-payment of your debt when you declare bankruptcy.
Stopping Automatic Payments
You may have set up automatic deductions for creditors and these automatic payments will continue until they are notified that you have filed for bankruptcy. It may take about a week for them to receive notice, so to expedite the process, you may want to notify them yourself sooner or through your bankruptcy lawyer. To officially notify your creditor, you have to fax or email a letter including your bankruptcy case number and the filing date with a specified Arizona bankruptcy court.
Make the time and effort to halt in advance all authorized deductions from your credit card, paycheck, or bank account. Stopping automatic payments isn’t always instantaneous, so wait for some time before you go and file for bankruptcy protection. Failing to do this may cause you difficulties so that you cannot afford to pay for basic expenses with your monthly income.
It certainly behooves you as a debtor to address any situation in which your creditor is authorized to take money from your paycheck or bank account to pay off a dischargeable debt. Definitely, you should also take care of any situation wherein a company is allowed to charge its ongoing services to your credit card.
File Bankruptcy the Smart Way! Contact an Arizona Bankruptcy Attorney Today!
There are ways to file for bankruptcy in Arizona with as little pain as possible while gearing for the best possible outcome at the same time. To achieve this, the legal advice provided by bankruptcy lawyers is invaluable. There’s more to preparing for bankruptcy filings than gathering documents and filling out bankruptcy forms. For guidance throughout the entire bankruptcy proceedings, as well as before and after bankruptcy, consult an experienced Arizona bankruptcy lawyer.
From choosing the right bankruptcy chapter (liquidation or reorganization) from the different types of bankruptcy in the bankruptcy code to teaching you how to file a bankruptcy petition and representing you until you get a bankruptcy discharge, a lawyer’s services ensure that you do things correctly within the confines of bankruptcy laws.
If you’re experiencing financial problems and seeking debt relief solutions, call us at Phoenix Fresh Start Bankruptcy Attorneys to schedule a consultation.
