As cliche as it may sound, life is full of twists and turns. No one knows when you’re going to experience financial stress. Once you get trapped in that situation, it won’t come as a surprise if you’d become desperate to escape. One, if not the most popular way?Filing for bankruptcy to wipe off your debt.
This may sound easy, but don’t get too enticed yet. If you’d ask any reputable bankruptcy attorney, you’d know that many people who try to go this way don’t end up achieving what they aim for. Here are nine common mistakes people do when filing for bankruptcy:
Choosing the wrong kind of bankruptcy. Each type of bankruptcy is suitable for a certain set of requirements and eligibility. This is why you need to know your goals, your financial capabilities, and your exemptions.
Not knowing the requirements. Before filing for bankruptcy, you need to attend first credit counseling and debtor education. Evidence of your compliance should be presented as well.
Doing the paperwork erroneously. A bankruptcy attorney knows how the process of filing for bankruptcy involves submitting several forms. Failing to fill out the forms correctly — or filling out the wrong forms — can make you unqualified to be declared bankrupt.
Not declaring all debts. One of the most essential rules of bankruptcy is declaring your every debt and listing down your every creditor (including friends and relatives). Doing so will prevent you from being accused of doing a preferential treatment.
Not declaring all assets. Purposely leaving out the assets that can determine your capacity to pay can prompt the court to disqualify your bankruptcy case.
Transferring property to family members or friends. You shouldn’t also transfer your assets to family members or close friends. This major red flag is an act of dishonesty that can similarly disqualify your case.
Assuming that creditors will never push back. What you need to know is that creditors will most likely be persistent in getting their money back.
Spending lavishly before filing for bankruptcy. If you use your credit card to go on a shopping spree before you declare bankruptcy, it’ll most probably won’t be included in your debts that are to be wiped off.
Waiting too long. Don’t be delinquent when it comes to managing your payables. As soon as you realize and admit you’re having a hard time paying off your debts, explore the options you have right away.
Why Hire A Bankruptcy Attorney
The law that governs debts and bankruptcy is rather intricate. Because of its complexity, you’d need to get help from a legal expert to help avoid committing costly mistakes — such as the ones listed above.
By hiring a bankruptcy attorney, you will be guided — from choosing the right type of bankruptcy to filling out the correct forms to ensuring that your assets are rightfully protected.
At a time when people are attuned to doing things DIY-style, filing for bankruptcy is definitely one of those things that shouldn’t be included on the list you’d want to accomplish on your own. And as you are facing some financial struggles, it would be best to do something that will be cost-effective for you in the long run.
If you need a bankruptcy attorney, we are all ears at Bolger Law Firm. Contact us today, let us know of the situation you’re in and we’ll do our best to help you.