Common Mistakes Made When Filing Bankruptcy

Mistakes Made When Filing Bankruptcy

The bankruptcy process is known for helping many consumers get out of debt but in order to obtain the fresh start you’re seeking, you want to go about the procedure in the right way.  Certain moves such as leaving out important information or lying about your finances could make your case more challenging upon being presented to the judge.

Your case may go a lot smoother when avoiding the following common mistakes:

Not Telling the Truth About Your Finances

Many people who file feel they need to hide assets or income in fear of not qualifying for bankruptcy, but this could lead your case to get dismissed without obtaining a discharge of debts.  Most people who decide to file qualify with many assets being protected by exemptions.

Leaving Out Information and Not Reporting Assets

All income should be reported upon filing and you should report any outstanding loans and assets of value such as a vehicle. Some consumers are tempted to leave out car loan details or the fact they have a vehicle at all; this could lead to you losing your assets if they are not disclosed when filing.

Not Listing all Creditors

Creditors learn about your filing including those with a zero balance.  You can save yourself additional headache by just listing all creditors instead of hiding certain accounts. In some cases you can maintain an account after bankruptcy that was established before the filing.

Transferring Assets Into Another Name Just Before you File

Consumers may think they are protecting or hiding their assets but this could bring more trouble if your trustee learns about the hidden asset.  An experienced bankruptcy attorney can help you maintain assets in question by exploring legal options to protect them.

Other actions to avoid include failing to disclose pending lawsuits, repaying family members large amounts of money before filing and running up balances on credit card accounts.