In today’s economic climate, more and more people are turning to bankruptcy as a solution to their debt problems. Often consumers are ill-prepared to even begin the process. Some people may even file a bankruptcy when they don’t need to because they don’t understand the what they are getting into. Others select an attorney who does them more harm than good. We’ve come up with a checklist to fully prepare you and protect you from unscrupulous attorneys.

1. Do you really need to file a bankruptcy?
2. Calculate your income.
3. Calculate your allowed expenses.
4. Qualify Yourself Through the Means Test.
5. Select an attorney.
6. Select a Debt Counseling Program.
7. Resolve to never find yourself in this position again. (Though we’re sure you’ve already done this.)

Many people assume that a bankruptcy is the only way out. In my honest opinion, most of the time, it’s not. Here is an article on bankruptcy alternatives we’d like you to read. However, after reading this article (or choosing not to read it), you still want to go through with bankruptcy, all of our best wishes.

What Income Will be Used in the Means Test? Pretty much all income is included in the qualification process with the exception of Social Security Act or payments received as a victim of a war crime, crime against humanity, or as a victim of international or domestic terrorism.

What Living Expenses Will be Used in the Means Test? The bankruptcy courts have strictly regulated the types and the amounts of living expenses which you can deduct the income which will be used in your Chapter 7 Means Test Calculations. The allowable deductible living expenses, which are based on your locale and family size are listed here: http://www.usdoj.gov/ust/.

Qualify Yourself Through the Means Test. Now that you’ve calculated your income before and after allowable living expenses, you are ready to take the Means Test. This test was designed by the bankruptcy courts to see if an individual has the means to pay back their existing debts. Refer to our Means Test page to qualify yourself. Pre-qualifying is not difficult and can save you trips and fees to an attorney. Sure, you might not get the figures exactly right, but if you’re not even close to qualifying, you’ll know.

Select a good bankruptcy attorney. Here are some tips to find a good bankruptcy attorney.

• Get a bankruptcy expert. The practice of law is specialized like medicine and you want a lawyer that specializes in bankruptcy.
• Get an expert in both Chapter 7 and Chapter 13
• Get someone who can also offer non-bankruptcy options to your financial situation.
• Get someone respectful – pay attention to how you are treated on the phone and in person. People that are too busy or too important to be nice are too busy to give your case the attention it deserves.
• Insist that you talk with a licensed lawyer, not a clerk.

Selecting Debt Counseling Programs A U.S. Bankruptcy Court sanctioned debt counseling program must be taken within 6 months of filing for bankruptcy. It can be taken online or in person. The official list of sanctioned pre-bankruptcy debt courses are listed here.

Don’t get yourself into this situation again. I’m not using the guilt skills I learned in Catholic schools here. In addition, I know for most people, bankruptcy was filed due to circumstances beyond their control. Whatever the reason, I’m sure you’re already suffering the stress of finding yourself in this situation. Put this suffering to good use and let it motivate you to better prepare yourself for the future. If it helps, I’ve gone through bankruptcy myself, so I know how awful it is.

Bankruptcy is a big deal and will have an affect on your life for the next 10 years. Be prepared!

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