People can unknowingly delay or prevent their bankruptcy case from being approved by doing things they shouldn’t. By reading the advice below, you can avoid making critical mistakes and ensure that you are able to get a financial fresh start should you determine bankruptcy is necessary.
When filing for bankruptcy many people are nervous and unsure of what to do. It is critical to the bankruptcy process to avoid mistakes and proceed responsibly.
1. Being dishonest when disclosing financial information
Honesty is critical when applying for bankruptcy. Lying is the number one bankruptcy mistake made and results in negative consequences for the debtor. Many people have a legitimate need to file bankruptcy due to illness, job loss, divorce, or low wages. It is important to accurately disclose your income, assets and any and all claims you have against others. By being honest the process will be much simpler and more successful.
2. Failure to list all creditors
A typical bankruptcy filing mistake is failing to list all creditors. Whether you have a co-debtor or have loans you will not want discharged bankruptcy process it is required to list all creditors, otherwise, you may jeopardize the bankruptcy process.
3. Failure to disclose all assets
Another common mistake is failing to disclose all assets. Many people forget or purposely do not disclose an asset, trying to hide it from the courts. Failure to disclose all assets tied to your name can result in fines, prison, or put the possibility of your loan discharge in jeopardy. If you have claims against others who owe you money, own a large item such as a boat or property, or have multiple bank accounts, be sure to provide this information to your attorney. If you aren’t sure if something is an asset, ask – your attorney will know the answer.
4. Transferring assets before filing
Some people think that by transferring assets to a friend or relative before filing for bankruptcy they can avoid reporting those assets and losing them as part of the bankruptcy process. In actuality, transferring assets is illegal and can result in criminal charges against you and possibly the person you transfer them to.
5. Waiting too long to file bankruptcy
Procrastinating too long is an important bankruptcy mistake to avoid. Waiting too long can result in foreclosures and repossessions of your home and other personal items you owe money for. By filing before foreclosure or repossession processes have started, you can avoid them and have a better chance of keeping your assets.
6. Filing for bankruptcy too soon
Filing bankruptcy too soon can cause problems as well. Although not a common issue, it’s important to talk to an experienced attorney to make sure you time the filing of bankruptcy correctly.
7. Not providing necessary paperwork
Forgetting or intentionally not providing all required documentation such as pay stubs, tax returns, and bank statements can result in setbacks in your bankruptcy process. You will speed up the process by providing all the necessary documents at once. Ask your attorney for a list to help you prepare everything they need.
8. Keeping loans you should discharge
In the bankruptcy process, you will review your current loans with your attorney and discuss which you need to have discharged and which you want to reaffirm (keep as is). Making poor decisions about what to do with each loan can result in continued financial stress for you and could possibly ruin your chance to recover financially.
9. Using a credit card before and after filing for bankruptcy
Something that many debtors often don’t know about is the problem with using a credit card before and after filing. It’s important for people to be aware that large purchases on their credit cards before filing bankruptcy, and within three months after filing, may not be dischargeable. Any balance transfers or cash advances should be discussed honestly with your attorney ahead of time.
10. Transferring money to family before filing
Paying large amounts of money to your family before filing can result in a negative outcome for you and your family. The money can be taken back from your family and will be distributed to all creditors.
11. Overall irresponsible behavior
When filing for bankruptcy, it is important is to show professionalism. Do not miss your hearing or your case may be dismissed with you responsible for the costs. Also, remember to always bring the required documents to your hearing.
Bankruptcy is a serious step; it’s critical to consult with an expert to be sure you choose the option that is best for your specific financial and life situation. The knowledgeable and professional team at Amanda Todd Daniels will draft a plan, negotiate with your creditors, and handle the legal process so that you can focus on other areas in your life.
During your first free consultation with Amanda Daniels, she will go over your financial situation in detail in order to determine if filing bankruptcy is a viable option for you and discuss the different types of bankruptcy. Contact her today at (662) 678-8009 to request a consultation.