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Preparing for Bankruptcy

Robert J. Adams and Associates March 2, 2021

Have you decided to file for bankruptcy? Or, do you want to look into exploring your options?

An experienced bankruptcy lawyer can help you understand how bankruptcy works. You will have to make many choices if you file for bankruptcy. Your first choice should be to hire a lawyer who can help you.

Robert J. Adams & Associates serves individuals who live in and around Chicago Land. We help you get ready for a new financial start through bankruptcy.

The following is some of what you need.

Income Tax Returns

  1. Income tax returns. For Chapter 7, you need the last 2 years of returns. For Chapter 13, you need the last 4 years of returns. What if I didn’t file?

  2. If you were not required to do so, we would prepare a statement.

  3. If you don’t have your returns on hand, then go to

Bills That Can Be Paid Before Filing

  1. Rent, mortgage payments, utilities, and insurance premiums.

  2. If you have child support and/or alimony, you can pay them if you can.

  3. If you owe current taxes, you can pay them.

  4. WHAT ABOUT MY CAR PAYMENT? I suggest you wait until you talk to your lawyer.

Information About Your Income

  1. Generally, this is your last 60 days of pay stubs.

  2. If on social security, unemployment, worker’s compensation, or pension, we just need a letter showing the monthly or periodic payments.

  3. If paid cash or by check, a letter from your employer on its letterhead.

  4. If self-employed: a log of your income for the past several months. Depending on your income, you might also have a log of your expenses.

  5. What if I’m married and living with my spouse, but only I am going to file? We need his/her income. (We don’t list his/ her name or social security number.)


All of your debts. We help get your free credit report, but some creditors do not report to the credit bureaus. Also, tell us if you have parking tickets or owe the Illinois Tollway Authority or the IRS.


You must list all your assets.

  1. The most important assets most people have are a house and/or cars.

  2. Household furniture and household goods. Generally, not much detail is required.

  3. Cash (what’s in your pocket) and bank or credit union accounts.

  4. Personal injury claims and worker’s compensation claims. Lawyers will protect your claims.

Stop Automatic Payments

Stop deductions for creditors. Your lawyer can help you with this.

What NOT to Do Before Filing Bankruptcy

Here are five things you should not do before filing for bankruptcy:

  1. Do not wait until a creditor sues you. When a creditor gets a judgment, they can take aggressive action. They can start wage and bank garnishments and levy liens. Bankruptcy will stop garnishments, but money already taken is lost. Liens survive Chapter 7. Some liens can be removed, but it is best not to wait.

  2. Do not use retirement accounts to pay debts. Most of the time, you can protect your retirement account during bankruptcy. Do not cash it in before filing your case in court.

  3. Do not incur new debt. For at least 70 days before filing for bankruptcy, don’t take out cash advances or use a credit card for “luxury goods,” or go on a spending spree.

  4. Do not hide assets. “Assets” are things you own that are worth money, like a house or car, a savings account, or even a valuable baseball card. If you hide these things from the court, you could be in trouble. Sometimes, people sell something they own to pay a bill, child support, or even buy groceries. You must make sure you keep all receipts of what you sold and what you used that money for if you do. It is best to talk to your lawyer before selling anything you own.

  5. Don’t repay friends and family loans. The judge could order your family member or friend to return the money. After a bankruptcy is filed, you can repay loans to your family or friends.

The above has been a general view to either prepare to file bankruptcy or thinking about your options. I hope it has been helpful.