There are a lot of different reasons that people ultimately choose to declare bankruptcy. Anything from a single unexpected medical emergency to a patch of unemployment can quickly cause a person to rack up debt they will not be able to pay off. Bankruptcy is based on the idea that people deserve a fresh start and there should be a way out of insurmountable debt. However, it is important that bankruptcies are handled correctly so that they do not lead to more legal issues.
Mistakes during bankruptcy can cause further financial difficulty rather than relieving financial strain. It is quite easy to slip up and make a potentially costly mistake. Your best bet is to have your bankruptcy handled by an attorney.
What Mistakes Should I Avoid When Declaring Bankruptcy?
Bankruptcy can be a very delicate legal procedure. Everything needs to be done correctly and in good faith. Some common mistakes people make during bankruptcy proceedings include:
- Transferring assets – If you are filing a liquidation bankruptcy, it is important that you do not hide or give away any assets. People often try things like signing major assets over to a family member so that they will not be liquidated. This is against the law, and the court will absolutely notice.
- Lying about assets – It is important that you report all of your assets. If you are using Chapter 7 bankruptcy and lie about your assets on the means test, your case could be dismissed and you could even be barred from filing again for your current debts.
- Getting into more debt – If it has occurred to you to max out your credit cards and take out a new loan right before you file bankruptcy, do not do this. It will be fairly obvious to your creditors that you deliberately took on more debt with the intention of immediately having it discharged. Your creditors will likely fight back against your attempts to discharge that debt and it will just cause more problems.
- Doing it alone – Trying to file bankruptcy without an attorney’s assistance can be a very costly mistake. Bankruptcy code is very complicated, and it is very likely that you will make a mistake.
- Choosing the wrong type – It is very important that you choose your type of bankruptcy wisely. Chapter 7 and Chapter 13 both have benefits and drawbacks that must be considered carefully.
Before filing, you should consult an attorney who can help you avoid these common mistakes and more.
Contact a Kane County Bankruptcy Attorney
If you are considering declaring bankruptcy, DLAW, PC can help you decide on the right course of action. Our experienced Geneva bankruptcy lawyers will guide you through the entire process so that your case is always well-handled. Call us at 331-222-7978 for a free consultation.