When you are deep in debt, bankruptcy can be the best option. It can erase the majority of your debts so that you can get on with the rest of your life. However, making a mistake during the bankruptcy process can slow things down. Here are five bankruptcy mistakes you should avoid making.
Not Disclosing All Your Assets
No matter how small you think they are, it is very important to disclose all of your assets in your bankruptcy paperwork. If you leave something out and the judge founds out later, he could deny your bankruptcy. It is always best to be completely honest and let your attorney know about all of your assets beforehand.
Using Your Credit Card Right Before Filing
Another mistake some people during bankruptcy is using their credit card right before filing. If you make purchases on your credit card just three months before filing for bankruptcy, it might not be discharged. The judge will assume you were trying to fraud your creditors and will not discharge the new debt you racked up. You will be expected to repay the debt.
Not Hiring a Bankruptcy Lawyer
Although you can file for bankruptcy on your own, it is not recommended. Bankruptcy law is quite complicated and easy to mess up. If you make even one mistake on your paperwork, the judge can deny your bankruptcy. If you hire a bankruptcy lawyer, he can help you with the bankruptcy paperwork and speed up the process. Working with a bankruptcy lawyer may cost you some extra money, but it will make things a lot easier.
Transferring Your Assets
Some people try to transfer their assets to a family member’s name before filing for bankruptcy. They may worry that their assets may get taken away during the bankruptcy process. However, transferring your assets is considered fraudulent and can get your bankruptcy thrown out.
Delaying the Process
Although the decision to file for bankruptcy should not be taken lightly, you should not delay the process. If you wait until your house is foreclosed or wages are garnished, it will be too late. If you are in financial trouble, you should definitely contact a bankruptcy lawyer as soon as possible.
The bankruptcy process can be stressful, but avoiding these big mistakes will make things a little easier. If you are honest with your bankruptcy lawyer and follow his instructions, everything should go smoothly.