Are you considering filing for bankruptcy? It is important to avoid common bankruptcy mistakes that can cause serious consequences. These include the dismissal of your case or the loss of valuable assets, including your retirement account.
You can navigate the bankruptcy procedure and stay clear of these frequent mistakes with the assistance of an expert bankruptcy lawyer. This article will discuss ten common bankruptcy mistakes to avoid.
Top Bankruptcy Mistakes to Avoid
Mistake #1: Not Consulting with a Bankruptcy Attorney
A big mistake people make when declaring or filing bankruptcy is not seeking legal advice. You can get guidance from an expert lawyer on how to file for bankruptcy and which form is ideal for your circumstances. The attorney may also assist you in comprehending the bankruptcy procedure and ensuring you do not make errors that could lead to the dismissal of your petition.
Mistake #2: Filing for Bankruptcy in the Wrong Chapter
Filing bankruptcy in the wrong chapter is a common mistake that can jeopardize your fresh start. A knowledgeable bankruptcy lawyer can assist you in choosing the right chapter for your circumstances.
Mistake #3: Transferring Assets or Paying Off Debts to Family Members or Friends
Transferring assets or paying off debts to family members or friends before filing for bankruptcy is a fraudulent transfer. Thus, it can lead to grave consequences. An experienced bankruptcy attorney can help you understand the rules regarding transfers and ensure that you avoid this mistake.
Mistake #4: Not Disclosing All Fees and Services Owed to Your Bankruptcy Attorney
It’s very important to tell your bankruptcy lawyer about everything you owe. Make sure that you’re honest about your obligations, including credit card debt.
Our experienced bankruptcy attorney in Media, PA, can help you figure out what fees and services you need to pay to avoid this mistake.
Mistake #5: Failure to Reveal All Assets
If you’re considering filing for bankruptcy, make sure that you don’t hide your assets. If your assets are eligible for sale to settle with your creditors, you must comply to proceed with bankruptcy. Trying to conceal assets can severely jeopardize your chances of obtaining financial relief.
Mistake #6: Not Attending the Required Debt Counseling Program
Before filing for bankruptcy, you should attend a debt counseling program. This program helps you understand the bankruptcy process and explore alternatives to filing for bankruptcy. The trustee may dismiss your case if you do not show up for this program.
Mistake #7: Running Up Bills Before Filing Bankruptcy
One of the common errors people commit prior to filing for bankruptcy is overspending and maxing out their credit limit. That can be problematic if your creditors suspect that you intentionally incurred the debts with no intention of paying them back. So, it is best to pay credit card debt before you file.
Mistake #8: Not Understanding the Bankruptcy Trustee’s Role
The bankruptcy trustee is in charge of managing your case. They look through your finances and figure out whether there are any assets that can help pay off creditors. Comprehending the trustee’s responsibilities and giving him/her accurate information is critical. An experienced bankruptcy attorney can help you understand the trustee’s role and ensure that you provide accurate information.
Mistake #9: Using Retirement Funds
It is not a good idea to pay credit card debt with retirement funds before declaring bankruptcy. Your bankruptcy trustee or creditors may protect your retirement accounts from seizure by making it unnecessary to use them to pay off your debts. Are you considering paying off your present bills? If so, avoid withdrawing funds from your retirement account.
Mistake #10: Filing After a Really Long Wait
To avoid accumulating more debt, it is best not to delay filing for bankruptcy. You owe the creditors more money the longer you wait. You can save significant money down the road by initiating your bankruptcy now.
You must start looking for a new job right away if you lost your work and are having financial trouble. Waiting until after filing for bankruptcy to start rebuilding financially may be too late.
The Consequences of Bankruptcy Mistakes
When it comes to bankruptcy, making a mistake is never ideal. Although Pennsylvania bankruptcy courts do understand that mistakes can happen, taking part in fraudulent behavior may lead to severe consequences. It can make it challenging to receive financial relief.
The potential impact of filing bankruptcy errors include:
- Filing an amended petition if the error made had a small impact on the bankruptcy petition and was genuine.
- Facing fraud charges, which can lead to a significant fine and a five-year jail term for each bankruptcy fraud charge.
- Forcing the bankruptcy trustee to recover assets you transferred to friends or family members.
- Having your petition denied by the trustee if they suspect fraud or an attempt to abuse the system.
You don’t want a minor mistake to force you to restart the process. That can be very inconvenient and costly when you are already under a heavy debt burden. An experienced lawyer can determine the best bankruptcy type and assist you in achieving financial freedom to prevent these problems.
Avoiding common bankruptcy mistakes is essential for a successful bankruptcy case. A knowledgeable attorney can guide you through the procedure and ensure you do not make these errors, which could have dire repercussions.
How Siddons Law Can Help You Avoid Common Bankruptcy Mistakes
At Siddons Law, we understand that bankruptcy can be a difficult and overwhelming process. Our experienced bankruptcy attorneys in Media, PA, can help you file for bankruptcy and ensure that you avoid common bankruptcy mistakes. We can also direct you through the bankruptcy filing process and assist you in deciding which type of bankruptcy is best for your circumstances.
If you are struggling with debt and considering bankruptcy, do not make common bankruptcy mistakes that can jeopardize your fresh start. Contact us today to schedule a consultation with an experienced bankruptcy attorney in Media, PA.