Bankruptcy is a complex legal matter. It is very easy to make mistakes.
Here are five of the most common mistakes we see.
Failing to List All Income and Assets
It can be difficult to gather all of your income and asset information. Yet, if you don’t, the courts can accuse you of attempting to hide assets. Your case could be dismissed, and even be charged with bankruptcy fraud.
It goes without saying that you should not try to hide any assets on purpose.
Failing to List All Creditors
If your financial life has been in a state of disarray for some time, you might struggle to figure out everything you owe. But it is absolutely vital that you do so.
First, failing to include a creditor may deprive a creditor of their rights. It can also give the impression that you’re trying to favor that creditor, especially if the creditor is a family member or friend.
Failing to include a creditor also means they won’t be included in your eventual bankruptcy discharge. And if you don’t include the creditor, they won’t receive notice that they must stop all collection activities (the automatic stay).
Open your mail, pull a credit report, go through your bank statements, and do everything possible to locate every debt you owe, even old collection agency items you might have forgotten.
Failing to Evaluate Pre-Bankruptcy Financial Decisions
If you go on a spending spree and buy many luxury items before filing for bankruptcy, those debts could be excluded from your discharge. That transaction could come under scrutiny if you make a major asset transfer, like selling a car or a house.
It’s important to discuss your last six months of financial activity with your bankruptcy attorney so that your attorney can devise a strategy that will serve you.
Choosing the Wrong Form of Bankruptcy
Many considerations must be considered when deciding whether to file Chapter 13 bankruptcy or Chapter 7 bankruptcy. If you choose the wrong form of bankruptcy, you may be unable to meet your overall bankruptcy goals.
While you might have some idea of the bankruptcy you think is best for you, it is absolutely imperative to go over your situation with an attorney.
Filing Pro Se
As you might have guessed, filing without an attorney can be a huge mistake. Representing yourself in a Chapter 13 case? 91.3% of those cases get dismissed before confirmation. The odds are better for a Chapter 7 case, but not by much. Less than half of Chapter 7 filers who try to go it alone manage to achieve a discharge in the end.
Remember, some bankruptcy cases come with pleadings, litigation, and attempts by creditors to keep you from attaining a discharge. If your bankruptcy gets complicated, you’ll be glad you invested in an attorney’s help.
Ready to get started? Contact our office to schedule a free consultation today.