From basic household expenses and medical bills to credit cards and rent, paying your monthly bills can be overwhelming. If you have lost income, become unemployed, or are no longer able to work due to a disability or illness, paying your monthly bills can even become impossible.
In these situations, filing bankruptcy is beneficial. While surprising for some to learn, more than a million people file bankruptcy each year. Since bankruptcy can affect your credit for up to 10 years, seeking professional advice will help you make the right decision.
To ensure your attorney has all the information needed to determine if bankruptcy is the right option for you and your financial needs, make sure you bring the following to your free consultation.
Pay Stubs/Proof of Income
Wiping out your debt and starting fresh will require proof that you are not capable of paying creditors. If you have lost your job, you will not be able to provide proof of income, but you should inform your attorney on when you lost your job. Also, if you are receiving unemployment benefits, provide your attorney with a statement showing this income.
If you are currently working, you must bring copies of your most recent pay stubs. If you are filing for bankruptcy jointly with your spouse, be sure they provide proof of income, as well.
Proof of income from investments, such as stocks and real estate, must also be given to your attorney during the initial consultation. This income must be included when filing a bankruptcy petition, proving that you are unable to pay off your debts.
Bill Statements/Proof of Expenses
If you are considering bankruptcy, you probably have an overwhelming amount of expenses each month. Your attorney will need to see bills and monthly statements during the consultation. These statements will be compared with your income statements to determine if bankruptcy is necessary.
Before your appointment, gather your mortgage statement or proof of your monthly rent. Also, save statements from credit card bills, auto loans, personal lines of credit, and student loans, for the last few months so your attorney can see total balances and minimum payments.
Insurance is also an important monthly expense that you should continue paying after filing bankruptcy. Be sure to provide your attorney with proof of monthly premiums that go towards health, life, automobile, and renter/homeowner insurance policies.
Child support, alimony, tax bills, and charitable donations should also be considered expenses. Proof of these expenses should be brought to your consultation. If you pay for the childcare or professional care of an elderly/disabled relative, disclose this information to your attorney. Lastly, include proof of any ongoing expenses related to your job or education.
Your attorney will also want to see a copy of your most recent tax return. Be sure to include both state and federal returns, since these will be used as proof of payment of income taxes, yearly income, and deductions. Your attorney will prefer to see the tax returns during the consultation. However, they are imperative documents to disclose to the creditors of the debt you are trying to dismiss through bankruptcy.
If you do not have hard copies of your most recent tax return, contact the Internal Revenue Service as soon as possible to ensure you receive the free transcripts in time. Fortunately, ordering transcripts can be completed through the website, mail, or via the telephone.
Every bankruptcy case is different, so your attorney may require additional documents before proceeding. To schedule a consultation that can determine if you should file bankruptcy, contact the Law Offices of Mihelich & Kavanaugh today.