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Being declared bankrupt is not uncommon. In fact, according to the Central Bank of Kenya, unpaid bank loans hit 10.7 percent in August 2017, compared to 9.9 percent the previous month.

These statistics mean that a large number of Kenyans could be facing bankruptcy.

 Do not pile up new debt

Beware of taking any more credit unless it's for necessities such as food, clothing, and utilities. Reason being your creditor may argue that you took the loan without the intention of paying back. This can be considered as fraud and definitely unhelpful to your petition. Do not transfer assets In the middle of all the bankruptcy proceedings, do not either sell or transfer your assets.

Do not pay back debts

This may seem obvious, but if you are planning to file bankruptcy do not pay back any loans given by friends or relatives. If you do, this may be considered by the court as a preferential transfer and may seem like you are able to pay creditors but are choosing not to.

Assess your finances

Get all your financial information in order. This means knowing your expenses, your total income, and debts. If you have no idea how to compile such information and lack the necessary resources to hire a professional accountant, consider using websites and apps. There is also the Credit Reference Bureau that gives credit reports free of charge once a year.

Open up to your lawyer

It might be humiliating but a key principle in ensuring your petition is successful is being honest with your lawyer. This means revealing all financial information, to enable your attorney handle the case properly and provide appropriate legal advice.

Budget

Filing for bankruptcy is not an excuse for you to be slack with your financial management. In fact, now more than ever, is the time to make a budget, and stick to it.

Learn from mistakes

This is definitely a situation where you do not want this to be true, and it doesn’t have to. Its never too late to grow, its never too late to change, and you certainly can learn from your mistakes. Take inventory of how you got yourself into this situation in the first place, and make the necessary changes to avoid getting here again.