How to Avoid These Three Common Bankruptcy Mistakes

Avoiding Mistakes in Bankruptcy

Bankruptcy can provide the relief you need when you are drowning in debt, but only if it’s done properly. Too many people leap into bankruptcy only to discover things don’t turn out as they’d hoped. Filing for bankruptcy has specific requirements and when your obligations are not met, the discharge available through bankruptcy is put at risk.

Sadly, many of the mistakes made during the bankruptcy filing process could have been avoided, had the filer taken time to learn about the most frequent errors and invested in working with a bankruptcy expert.

What are the most common bankruptcy mistakes you need to avoid?

Not taking the time to learn about the alternatives to bankruptcy – and whether any of them is a better option.

Bankruptcy is perfect for a lot of people who are drowning in debt and looking for a fresh start, but it isn’t right for everyone. Depending on your specific financial situation and your debts, bankruptcy might not help you accomplish your goals.

For instance, is the bulk of your debt related to unpaid child support? Unless you’re trying to free up money from other dischargeable debts you have to put toward child support payments, bankruptcy isn’t going to help you. This is because child support is non-dischargeable.

There are a few types of debt that are non-dischargeable. It’s important to know how bankruptcy will affect your debts before you file.

It’s also important to have an expert look at your overall financial situation. Even if a debt is dischargeable, there might be a better option for dealing with it than bankruptcy. The important thing is taking the time to learn about and consider all of your options before filing.

Choosing the wrong type of bankruptcy.

So you’ve determined bankruptcy is the best option for dealing with your debts. Do you know which of the different types of bankruptcy will serve you best?

One of the most common bankruptcy mistakes is opting for the wrong type of bankruptcy – and doing so can cost you a lot.

Chapter 7 bankruptcy requires the liquidation of the majority of your assets. Chapter 13 allows you to exempt many of your assets from liquidation. Making the wrong choice here could result in the loss of your home, your vehicle, and other belongings.

Choosing the wrong type of bankruptcy could also:

• Cost you more to file
• Prevent you from discharging certain debts
• Affect how much you’re able to keep from your earnings each month
• Have a detrimental effect on your spouse or loan co-signers

It’s important to work with an expert and be completely transparent about your situation. This ensures you’ll make the right decision regarding what type of bankruptcy you choose when you file.

For more information concerning the differences between Chapter 7 and Chapter 13 bankruptcy, check out this article from the Experian credit bureau.

Not disclosing all of your assets when you file.

Speaking of transparency, it’s essential you disclose all of your assets and debts when you file. Hiding any information from the bankruptcy court can result in immediate dismissal of your case.

Worse, it could get you accused of bankruptcy fraud.

When meeting with a bankruptcy attorney, make sure you are open and honest about your financial situation. It’s not going to do you any good to attempt to hide anything from your attorney. Do your best to avoid honest mistakes and be upfront about your concerns, even if you think something you did shouldn’t matter when you file.

It’s always best to have an attorney evaluate your situation and determine what is of significance to the bankruptcy court.

If you’re thinking about bankruptcy and you want the process to be free of complications and surprises, we can help. Contact R. Flay Cabiness, II, P.C. at (912) 554-3774 (Brunswick, GA); (912) 375-5620 (Hazlehurst, GA) or; (912)-554-3756 (Jesup, GA).