A Bankruptcy Lawyer Explains Common Mistakes People Make When Filing

Bankruptcy protection gives debtors a fresh start. But before filing, it is important to know the common mistakes people make during the process. Not Being Truthful The means test is the first step to filing bankruptcy. It consists of several financial questions that will determine if you can pay your creditors. If you don’t mention all of your income or assets, your case could be dismissed. A bankruptcy lawyer can help you make sure everything is presented correctly. Not Listing Pending Lawsuits If you have filed a lawsuit against someone for any reason, you must list it as an asset in your bankruptcy paperwork. Not Mentioning Cars or Car Loans If you have a car for which you are still paying the loan, you have to list it as a liability. If you own the vehicle outright, it gets listed as an asset. Should you fail to do this or you transfer the car to a family member shortly before filing for bankruptcy, you could hurt your case. Running up Your Credit Card Balance This is a bad idea because the creditor will look over the charges upon receiving the bankruptcy notification. If the creditor believes you purposely ran up your balance before filing, he has the legal right to challenge your request to eliminate the balance. Not Mentioning Creditors You have to list all creditors in your bankruptcy filing. If you don’t, it can lead to your case getting dismissed. Transferring Assets Transferring assets for the sole purpose of protecting them from being taken is illegal. There are legal ways you can protect assets that could potentially be at risk. If you would like to learn more about bankruptcy, please contact us. As bankruptcy lawyers, we will determine if filing for Chapter 7 or Chapter 13 is right for you.