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Planning Bankruptcy? How A Financial Planner Helps At All Stages

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Are you considering or even in the early stages of declaring bankruptcy? Bankruptcy is an important tool to protect your finances, your mental and emotional health, and your future. But if you're at this point, should you also spend some money on financial planning? The answer may be yes. Here are a few ways they can help you before, during, and after a bankruptcy filing.  

Before Bankruptcy

Bankruptcy should be a last resort for most Americans. If you've tried to get a handle on your debt, income, or spending issues on your own, try seeking out a financial professional to help. A financial planning consultant will work with you to identify all your debt and develop a payoff plan, figure out a workable budget, or prepare better for emergencies. You may even be able to avoid bankruptcy.

If you do decide to file for bankruptcy protection, some of your assets will be exempt from liquidation. This includes things like retirement accounts, your primary vehicle, and even money needed for expenses in the near future. How can you maximize these? Should you boost retirement contributions or better invest them? Can you increase savings to use the entire exemption of cash? Be sure to target your particular needs. 

During Bankruptcy

If you have to file for bankruptcy, you can still use a financial professional to make it successful. Debtors who file Chapter 13—or repayment plan—bankruptcy, need to live on a strict budget throughout the repayment term. Your financial planner can help you stay the course. They will also offer guidance on debts that are non-dischargeable, like student loans or support. 

Chapter 7 filers can have as little as a few months to prepare for their post-bankruptcy future. So don't wait until you exit the bankruptcy to start planning. The best path to success is to start off on the right foot. Map out your new financial plan with a professional as you wait for your bankruptcy to be finalized. 

After Bankruptcy

When you exit bankruptcy, you're ready to start moving forward with your life. Most people's number one goal at this point is to avoid falling back into debt or spending traps. The main goal of any financial planner is to design a more successful financial future, so this is right up their alley.

Your planner will help with retirement savings planning, budgeting, setting up sinking and emergency funds, using credit wisely, and smart investing. And they'll be there for you over as long a period as you need them. 

Where to Start

No matter how close or how far you are from actually filing for bankruptcy, a financial planning consultation can help you. Learn more by making an appointment today. Whatever your future holds, they will help you make sure it's brighter. 

Contact a local financial planning practice to learn more.