What Should I Do Before Filing for Bankruptcy?

December 5, 2025

Bankruptcy may present you with a powerful tool that can help you get your financial house in order. Before you can declare bankruptcy, you need to take steps to prepare for the process. Then, you may have the greatest chance of success in emerging from bankruptcy with the fresh financial start that you need. Here are some steps that you need to take before filing for bankruptcy. One of the most important things that you can do is to consult with an experienced bankruptcy attorney to prepare for the process.

Take a Credit Counseling Course

Under Maryland law, it is a legal requirement that you complete a credit counseling course within 180 days of filing your bankruptcy petition. When you file for bankruptcy with the court, you must include a certificate of completion that shows that you took this course. It is public policy that you know how to engage in sound financial management once you emerge from the bankruptcy process.

Organize Your Paperwork

When you file a bankruptcy petition, it must have certain information about your situation. It is not possible to file a comprehensive petition if you do not have all of your information organized and in place. Take the time to get organized so that you can provide all necessary information to your bankruptcy lawyer when you first speak to them.

Refrain from Taking Out New Credit

Bankruptcy courts are very sensitive to the fact that creditors are taking a loss when you seek protection. They do not want to see that you took out new credit prior to filing the petition. Then, it would look like you declared bankruptcy with the intent of evading obligations for credit that you recently obtained. You must be conscious of this fact and avoid making any large purchases in the time before filing for bankruptcy.

File Your Taxes

It is another legal requirement in the bankruptcy process that you have filed your most recent year’s tax return before you can seek protection. The bankruptcy trustee would receive a copy of this tax return after you have filed. They would look for evidence that you have filed your taxes. Your petition will be rejected if there is no evidence that you have filed your recent tax return.

Stay Current on Your Car and Home Payments

Although you are experiencing financial distress, it is vital that you stay as current as you can on payments for your collateralized debt obligations. This includes your mortgage and your car loan. You will have the opportunity to reaffirm your collateralized obligations at the conclusion of the bankruptcy process. It can be much more difficult if you are far behind on these payments.

Do Not Transfer Property Out of Your Possession

Chapter 7 bankruptcy is a liquidation by nature. You may be required to surrender certain property to the bankruptcy trustee, who would then sell it and use the assets to pay your creditors. Transferring property out of your possession prior to declaring bankruptcy can land you in serious trouble. Not only can the property be clawed back and taken, but you could also end up facing accusations of fraud. It is crucial that you maintain the status quo and leave all of the property you own in your possession.

Hire a Bankruptcy Lawyer

Bankruptcy is a legal process, and you are better off when you do not try to go through it on your own. There are various legal issues that may arise during the bankruptcy process, and you would need the help of an experienced attorney. There is no guarantee of success in the bankruptcy process. To have the best chance of emerging from it free of the debt that has been weighing you down, you should hire a bankruptcy attorney to represent you.

Baltimore Bankruptcy Lawyers at LeViness, Tolzman & Hamilton Give You the Support You Need

If you are in financial distress, speak to the Baltimore bankruptcy lawyers at LeViness, Tolzman & Hamilton.  We can review your situation and help determine whether bankruptcy is the right option for you. Schedule a free initial consultation with us by filling out an online contact form or by calling us today at 800-547-4LAW (4529). Our offices are in Baltimore and Owings Mills, and we serve clients throughout Maryland.