The Law Offices of Ronald E. Stadtmueller help individuals and enterprises avoid common bankruptcy mistakes.
If you want to keep some of your debts, a repayment plan via a Chapter 13 bankruptcy may be the right move if you are struggling. Alternatively, Chapter 7 could let you discharge everything to move on faster.
But no matter what type of bankruptcy you go with, there are several missteps a debtor can make along the way. Some more significant mistakes have severe implications or may disqualify you from bankruptcy protection.
Here are the most common bankruptcy mistakes to avoid and how to escape them.
Mistake #1 — Run Up Bills Before Filing.One of the top mistakes people make before declaring bankruptcy is running up their bills and using all available credit. Unfortunately, if your creditors have reason to believe that you ran up the balance before you declared bankruptcy, they can challenge your request to discharge the debt.
Mistake 2 — Transferring Property. Transferring your property in the hopes of protecting it while you declare bankruptcy is against the law and a red flag for bankruptcy court officials and creditors. All your valuable assets must be included in your bankruptcy petition to determine whether they are tangible assets or should be listed as a liability on your bankruptcy petition.
Mistake 3 — Hiding Assets. One of the top mistakes you can make when attempting to declare bankruptcy is hiding your assets. Prove to the court that you cannot cover your outstanding debts. If your purchases can be sold and used to repay creditors, as seen in Chapter 7 bankruptcy declarations, you must be prepared to do so.
Mistake 5 – Using Retirement Money. Never tap into your retirement savings accounts to pay off your credit debt before you declare bankruptcy. When you file for bankruptcy, your retirement savings accounts may be exempt.
Mistake 6 – Picking the Wrong Chapter. Working with your bankruptcy attorney to determine the type of bankruptcy best fits your case is vital. Declining a Chapter 13 bankruptcy petition when you should have filed under Chapter 7 could make the bankruptcy process more drawn out than it needs to be.
Mistake 7 – Taking on New Debts. As soon as you realize you are overwhelmed by debt you cannot pay, one of the biggest mistakes you can make is continuing to take on new debt. Now is not the time to start spending money on your credit cards and incurring additional obligations.
Mistake 8 – Waiting Too Long to File. Do not wait far too long to file your bankruptcy declaration. The longer you wait, You will owe your creditors should you stay longer. If you start working on your bankruptcy plans now, you may be able to save yourself a vital amount of money in the long run.
The Impact of a Bankruptcy Mistake
Mistakes happen, and the bankruptcy courts understand this. However, if the court finds you engaging in fraudulent behaviors, they may be unwilling to help you find financial relief.
It is best to use a bankruptcy attorney who can ensure you comply with state and federal bankruptcy laws, identify the correct type of bankruptcy, and help you achieve financial freedom through bankruptcy.
Our Attorney At The Law Offices Of Ronald E. Stadtmueller Can Help
The best way to protect yourself as you navigate the bankruptcy filing process is by having an experienced bankruptcy attorney advocating for you. In doing so, you can avoid many of the previously mentioned mistakes and take steps to secure financial relief as soon as possible.
Our Legal Counsel for Chapter 7 bankruptcy solution San Diego can give you a fresh start. We can help you determine whether you are eligible for Chapter 7 bankruptcy and if it is your best solution for dealing with your debts.
When you are prime to move forward, contact The Law Offices Of Ronald E. Stadtmueller. For a free and confidential case review. You can reach us online or call (858) 564-9310 to get started.