Bankruptcy and broke

When to file?

Declare Bankruptcy When Broke Or While You Still Have Cash?  Many people think that they should declare bankruptcy when they’re totally broke. Being penniless will actually make the process much, much, harder. While you can certainly declare bankruptcy on your own, many people choose to hire a bankruptcy attorney, which can cost between $1,000 and $2,500, even for a simple case.  Trying to do a DIY bankruptcy is not advisable.  Just google the sad stories about people who lost everything because they didn’t get help to file a bankruptcy case and lost their home because of it.

If you know you are heading towards bankruptcy, it can be a smart move to stop paying bills (like credit cards that may be discharged anyway) and save your cash for an attorney. But prior to doing this, contact a bankruptcy lawyer near you for some advice.  Most Utah bankruptcy lawyers offer free consultations and its valuable service they provide.  Its not surprising that bankruptcy attorneys don’t take credit cards so you need to find another way to pay for their services.

If you go down this rout you will want to keep paying on your mortgage or car loan, since you will have to make up those missed payments plus fees if you want to keep the car or home at a later time. Just know that once you declare bankruptcy, your creditors will be notified and they’ll probably reduce your available credit or otherwise limit you from further credit card use. So if you’ve been living entirely on credit, you will need to have cash on hand for living expenses after submitting your bankruptcy petition.  Now is a good time to go onto a cash only basis anyway to avoid other costly problems of credit card use just prior to a bankruptcy case filing.

My suggestion is try and avoid filing for bankruptcy when broke but as always consult an experienced bankruptcy lawyer before you make any such financial move.

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