Bankruptcy is complex and should not be taken lightly. In order to avoid mucking up your bankruptcy petition, it’s important to know the mistakes that can derail your efforts. A bankruptcy lawyer can help ensure you don’t make any key errors that would stall your case or result in unintended consequences. You can click here to understand more about how a bankruptcy lawyer can help you with filing bankruptcy.
The most common mistakes people make when filing for bankruptcy are:
- Repaying friends, family members, or business associates prior to filing for bankruptcy
Repaying debt payments to people you owe prior to bankruptcy can seriously harm your bankruptcy case. The most common way this happens is when a debtor believes they should repay debts out of the order they are listed in the petition. In fact, your bankruptcy petition is a legal document that must list all of your debts in a specific order. If you repay a debt out of the order, it will create a payment that cannot be discharged in bankruptcy.
- Large amounts of credit usage prior to the filing of a bankruptcy
If you have a large amount of credit available and have used a lot of it prior to filing for bankruptcy, this can be a cause for concern. It’s important to know how much you’ve used, how much is outstanding, and what the terms of your credit agreements are. Many people don’t realize that credit card issuers continue to charge interest after filing for bankruptcy.
- Transferring assets out of your name prior to filing for bankruptcy
Transferring assets out of your name, such as transferring title to a home or gifting assets to family members, is a huge mistake. You will have to disclose such transfers in your bankruptcy petition and can be asked to return the assets.
- Delaying getting legal help
If you are considering filing for bankruptcy, it is best to get a free consultation with a bankruptcy lawyer as quickly as possible. There is no set time frame for when you must file for bankruptcy, but it’s best to file as soon as you can and not put it off. Hiring a bankruptcy lawyer early on can help you submit a flawless petition leading to a successful outcome. Many times, waiting to hire a bankruptcy lawyer can cause complications.