Filing for bankruptcy is a significant financial and legal decision that can help individuals or businesses reset their financial future. While it may feel overwhelming, knowing what steps to take before filing can make the process smoother and less stressful. Whether you’re considering Chapter 7 or Chapter 13 bankruptcy, being prepared can help you make informed decisions and avoid costly mistakes. If you’re located in New York, especially Staten Island, working with a trusted attorney like the Law Office of Kevin Zazzera can ensure you’re on the right path.
In this guide, we’ll walk you through the most important things you need to do before filing bankruptcy. From evaluating your financial situation to gathering documentation and choosing the right type of bankruptcy, this article will help you prepare properly—step by step.
1. Understand What Bankruptcy Can and Cannot Do
Before filing, it’s important to know the benefits and limits of bankruptcy. While it can eliminate many types of debt, it won’t solve all financial problems.
What Bankruptcy Can Do:
. Eliminate unsecured debts (like credit cards and medical bills)
. Stop foreclosure (at least temporarily)
. Halt wage garnishments and debt collection
. Provide a fresh financial start
What Bankruptcy Cannot Do:
Eliminate certain debts like student loans, recent taxes, and child support
. Prevent repossession of property unless debts are paid
. Improve your credit score immediately
2. Review Your Financial Situation Honestly
The first step to preparing for bankruptcy is knowing where you stand financially. Create a detailed list of your:
. Debts: credit cards, loans, unpaid bills
. Income: from jobs, benefits, alimony, etc.
. Assets: property, savings, vehicles, investments
. Monthly expenses: rent/mortgage, utilities, food, etc.
This snapshot will help determine if bankruptcy is the best option—and if so, which chapter to file under.
3. Determine Which Type of Bankruptcy is Right for You
There are different types of bankruptcy filings for individuals and businesses, but the two most common for consumers are Chapter 7 and Chapter 13.
Chapter 7 Bankruptcy (Liquidation):
. Ideal for people with little to no disposable income
. Most unsecured debts are discharged
. Some non-exempt assets may be sold to pay creditors
. Process is quicker (usually 3–6 months)
Chapter 13 Bankruptcy (Repayment Plan):
. Suitable for individuals with regular income
. You keep your property and repay debts over 3–5 years
. Good option if you’re behind on mortgage or car payments
4. Gather All Required Financial Documents
Having your paperwork in order will save time and reduce delays. Start collecting:
. Pay stubs or proof of income (last 6 months)
. Tax returns (last 2 years)
. Credit card and loan statements
. Utility bills and other recurring expenses
. Bank account statements
. Car titles, mortgage documents, and lease agreements
These documents are essential for your bankruptcy attorney to evaluate your case and complete your filing accurately.
5. Avoid New Debt or Major Financial Changes
Before you file, do not:
. Rack up new credit card charges
. Take out personal loans
. Transfer assets to friends or relatives
. Pay off loans to certain creditors while ignoring others
These actions can be seen as fraudulent or preferential transfers by the bankruptcy court and may result in denial of discharge or penalties.
6. Take the Required Credit Counseling Course
Federal law requires anyone filing bankruptcy to complete a credit counseling course from an approved provider. You must complete this course within 180 days before filing. The certificate you receive must be submitted with your bankruptcy petition.
There is also a second course—the debtor education course—which must be completed after filing but before your debts are discharged.
7. Consult with a Qualified Bankruptcy Attorney
Bankruptcy law is complex. Even small mistakes in paperwork can result in a dismissed case or loss of assets. Consulting an experienced attorney ensures your rights are protected, your filing is correct, and your financial recovery begins on the right foot.
The Law Office of Kevin Zazzera is a trusted resource in Staten Island that helps clients through every step of the bankruptcy process—from preparation to discharge.
8. Understand the Impact on Your Credit and Future
Bankruptcy will appear on your credit report for 7–10 years, depending on the type filed. However, the impact fades over time, especially if you practice responsible financial habits.
Here’s how to begin rebuilding your credit after bankruptcy:
. Apply for a secured credit card
. Make payments on time
. Keep credit utilization low
. Check your credit report for errors
Many people are surprised to find they can start improving their credit score just months after discharge.
9. Prepare for Life After Bankruptcy
Filing bankruptcy is just the beginning of your fresh start. To stay on the right path:
. Create a realistic monthly budget
. Save for emergencies
. Avoid unnecessary debt
. Stay educated about credit and financial planning
Bankruptcy doesn’t mean failure—it’s a legal tool designed to help people recover and rebuild.
10. Common Mistakes to Avoid Before Filing
Many people make avoidable mistakes before filing. Make sure you:
. Don’t drain retirement accounts (they’re often protected in bankruptcy)
. Don’t ignore lawsuits or collection letters
. Don’t hide or transfer assets
. Don’t wait too long if creditors are closing in
Working with a qualified professional like bankruptcylawyerinstatenisland.com ensures you avoid these pitfalls and make smart, legal decisions.
Conclusion: Filing Smart for a Fresh Start
Bankruptcy can be the key to unlocking a new financial chapter in your life—but only if you’re well-prepared. Understanding your financial situation, choosing the right bankruptcy chapter, avoiding critical errors, and working with an experienced attorney are all essential steps. Remember, bankruptcy is not a defeat—it’s a second chance.
If you’re in Staten Island and need guidance, the Law Office of Kevin Zazzera provides compassionate, knowledgeable support to help you move forward. You don’t have to navigate this alone—get the help you need and take back control of your financial future.
