The bankruptcy process can forever change your life. While many people are capable of realizing positive change through bankruptcy, by making mistakes during the process, some people can end up facing obstacles that last for years. The following will review some common mistakes to avoid when filing for bankruptcy.
Not Honestly Disclosing Your Assets
Chapter 7 bankruptcy involves a means test, which requires you to disclose all of your assets and income because this amount determines your ability to pay off creditors. If you do not honestly disclose your assets, there is a good chance that your case will be dismissed. In some situations, you might even be prohibited from ever filing for bankruptcy again.
Giving Assets to Family Members
You are prohibited from giving away any of your assets to friends or relatives with the understanding that they will give the assets back to you at a later date, after your bankruptcy filing is complete. There is a risk that if you attempt to hide assets in such a way, you could end up losing them.
Accruing Credit Card Debt Before Filing for Bankruptcy
If a creditor determines that you purposefully accrued additional credit card debt in anticipation of filing for bankruptcy, the court can challenge your request to eliminate some or all of the debts that you owe. You can end up owing money on credit cards even after the bankruptcy process is concluded.
Accruing New Debt
Not only should you avoid credit card debt right before filing, it is a bad idea to take on any type of new debt after filing for bankruptcy. Instead, suspend all debt once you file for bankruptcy.
Failing to Perform Adequate Research
Not all debt that you have will be covered by bankruptcy. There are also a number of complex laws and regulations regarding how the bankruptcy process applies. Perform your research ahead of time and learn as much as possible about the bankruptcy process.
Failing to Speak with a Bankruptcy Lawyer
Bankruptcy code is one of the most complex and difficult areas of law that exists, but a knowledgeable bankruptcy lawyer understands the various complexities involved. A bankruptcy attorney also understands how to best protect your assets and what the most likely outcome of a situation will be.
Speak with an Experienced Bankruptcy Lawyer Today
If you are debating filing for bankruptcy, you likely have a number of questions about the process. Speak with an experienced bankruptcy attorney. Contact attorney Jim A Lyon today to schedule a free initial case evaluation. Attorney Lyon has helped numerous people successfully navigate bankruptcy and obtain the results that they deserve.