The decision to file for bankruptcy is not an easy one for most people. This is partially because most people lack an understanding of the process and what to expect. Preparing yourself before filing is the best way to ensure you get the most out of your case. In general, there are three main questions you should ask a bankruptcy attorney before filing the petition.

What Debts Can Be Discharged?

Contrary to popular belief not all debts are eligible for discharge in bankruptcy. While most unsecured debts such as medical bills and credit cards do qualify, there are others that may not. Certain tax debts, court ordered payments and personal loan debts may be restricted from your bankruptcy filing. Income tax debts may be eligible, but there are specific rules as to whether or not a particular income tax debt is eligible. Student loan debts and back due child support payments are two debts that rarely become eligible for discharge in bankruptcy. Secured debts such as a mortgage are car loan are generally eligible for bankruptcy, but typically only qualify for Chapter 13. Knowing which type of debt you hold and its likelihood of being discharged can prevent you from wasting time and effort on a case that could end up dismissed in the end.

Are My Assets At Risk?

Although most people hold the assumption that all assets are at risk in bankruptcy, the truth is that this rarely happens. In some cases the bankruptcy court may determine that your financial situation warrants the liquidation of a few assets in order to satisfy debts to creditors. Again, these cases are not the norm and most people find that their assets are completely safe through protection under bankruptcy exemption laws. In general, assets involved in a Chapter 13 filing are 100% safe from creditors as long as payments are being made according to the repayment plan.

Is There Anything I Need To Do First?

Most people are in a frantic state before filing for bankruptcy trying to find a way to resolve their financial troubles. Although there is much to do prior to filing for bankruptcy, there are also important steps that should be taken to prevent certain actions. For example, selling or giving away assets prior to a bankruptcy can be problematic and may impede the outcome of the case. Acquiring more income or paying down debts are also two actions that could negatively impact the outcome of your case. The general rule of thumb is to freeze all unnecessary spending, excess debt payments and moving of assets within the six months prior to filing.