Before filing for bankruptcy, there are some important considerations that you must make to ensure that you file properly and with your best interest in mind. These considerations must be undertaken to ensure that you can reclaim your personal credit and straighten out your finances after filing, and to ensure your future financial life is healthy and strong.

First, you must determine if your debts are dischargeable. Due to the nature of some debts, filing for bankruptcy will not provide any relief; it is important to talk to a lawyer before bankruptcy to see if this option makes sense for you.

Weighing the costs of bankruptcy is an important step to take, too; the cost of the bankruptcy cannot be greater than the benefit you will receive from filing, for example. Declaring bankruptcy will not completely wipe your financial slate clean, so it is important to understand the risks and benefits inherent with your specific bankruptcy filing and possible results.

Bankruptcy is a one-time solution, but it should not be used as a crutch. As such, it’s important to think about future financial problems, too; if your bankruptcy problems were caused by a poor lifestyle, think about the bankruptcy itself and the future. If you are not able to change your lifestyle issues, there are more significant problems at hand than bankruptcy and overcoming this issue.

Understanding the impact of bankruptcy on work and home, too, is immensely critical. Employers will check credit scores and credit reports before hiring new employees, and bankruptcies often raise questions about employee’s financial judgment relative to theft and embezzlement. Furthermore, landlords and banks will dutifully check credit reports on the premises of obtaining a mortgage, and can prevent you from renting a home or apartment due to a poor credit score.

There are two basic forms of bankruptcy a person can pursue; chapter 7 and chapter 13. Chapter 7 is a liquidation style bankruptcy, where a trustee is appointed to oversee property, assets are surrendered to pay off creditors, you are allowed to keep some personal property that is deemed necessary and important, and most debts are cancelled accordingly.

In Chapter 13 bankruptcy, you typically set up a plan to repay debts in installments, and if approved by the court, a trustee is involved to oversee payment and creditor compliance. This bankruptcy, known as wage-earner bankruptcy, is particularly useful when a debtors hold that the financial crisis faced is merely temporary, and their income will grow in the future to account for the debts and re-pay creditors in good time.

Finally, it’s important to find a good bankruptcy lawyer for your needs. You want to find a good bankruptcy lawyer who has handled hundreds of cases, and has a good system in place to efficiently file all the paperwork necessary to claim bankruptcy.

Bankruptcy is a serious matter, but with a little bit of preparation and foresight, it can be overcome in an efficient way. It is important to understand your needs and opportunities when filing for bankruptcy, in order to maximize your return, please creditors, and get on with life.