Dos and Don’ts While Declaring Bankruptcy

Bankruptcy is a financial state in which a person or an entity is incapable of paying back their debt to their creditors. It is necessary to file for a bankruptcy in cases when your debts are out of reach as it functions as a financial ‘reset’ button. The protection from a federal bankruptcy court is only granted once you have filed for it with help of an attorney in Edmonton. It is then imperative that you time your bankruptcy filing among other responsibilities.It is also important that you understand filing for a bankruptcy is certainly an important move under certain circumstances where your debt is on a constant upward spiral and your liquid cash is running out. Here is a guide to dos and don’ts that would help you avoid making blunders that would cost you:

The Dos

It is important to make the correct, practical choices to make sure you manage the damage control well:

Time Your Bankruptcy Well

There is a misconception that one must file for a bankruptcy only when they are absolutely broke. This is not true, having liquid cash at your disposal is an essential ammunition one needs while filing for bankruptcy. Additionally, one needs money to hire the only ally that could help you in this situation i.e. a professional attorney in Edmonton.

Hire an Attorney in Edmonton

Aside from the fact that you have to hire an attorney in Edmonton, understand that the attorney intends to help you. For this purpose, it is crucial that you are being honest with your attorney. It is important to disclose all relevant information regarding your assets, income, debts, and expenses.

Make Your House and Automobile Payments

While you still have the capacity, it would be practical to continue your outstanding payments for assets such as a property or automobiles. You are required to make those payments if you intend to keep these assets later on. Failure to make those payments would result in you losing possession of those assets.

The Don’ts

Not making the wrong move is just as important as making the right move. Here are a few things to avoid while filing for bankruptcy:

Borrowing More Money

Borrowing more money or continuing to use your credit card is not the smartest idea. According to Bankruptcy Laws in Canada, there is a certain limitation to the amount of money one can spend on their credit cards prior to declaring bankruptcy.

Draining Your Retirement Fund

There is a provision to save most of your retirement funds in the event of a bankruptcy. A common mistake that people make is paying their debts with their retirement fund. A professional attorney in Edmonton would assess your financial situation objectively.

Selective Repayment of Debt

Selectively paying back your debt to your friends or relatives within a specific period of filing for bankruptcy is something that has the potential to backfire. This would certainly be considered a ‘preferential transfer’, and then risk the financial security of those people that you have recently paid back.Your first priority post making the decision to declare bankruptcy is hiring a professional attorney in Edmonton. Prowse Chowne has been a respected law firm for an extensive period of time, and consulting their experienced team of attorneys would certainly help your case.