The actions you take leading up to filing for bankruptcy can immensely affect your ability to enjoy a ‘fresh start.’ For your process to be successful, you must put the necessary effort and time to learn how the entire process works. Since bankruptcy is a complex area of law, making mistakes is common. However, you do not have to!
Look Out For These 7 Mistakes
Making some mistakes when filing for bankruptcy can cause numerous problems in your quest to obtain a discharge. By avoiding the following seven mistakes, you can have a smooth and successful bankruptcy process devoid of extensive hurdles.
Mistake #1: Filing The Wrong Type Of Bankruptcy Or Under the Wrong Bankruptcy Chapter
Many differences exist between Chapter 13 and Chapter 7 bankruptcy. The type of bankruptcy you choose to file mostly depends on your personal circumstances and the objectives you wish to accomplish. If you opt to file without an attorney, you must learn everything you can about the differences, pros and cons of both Chapter 13 and Chapter 7 bankruptcy.
Mistake #2: Failure To Complete And File The Right Forms
The process of filing for bankruptcy entails filling out an extensive set of forms and then filing them with the court. On top of the schedules and forms debtors need to complete, most bankruptcy courts have their own forms that you need to file. For those that opt to file without an attorney, you are responsible for getting all the right forms and filling them accurately. To find the official bankruptcy forms go
For those that opt to file without an attorney, you are responsible for getting all the right forms and filling them accurately. To find the official bankruptcy forms go here and get adequate information on how to complete the appropriate bankruptcy forms.
Mistake #3: Failure To Exempt Your Property
In Chapter 7 bankruptcy, exemptions protect your property. They allow you to pay your creditors less than in a Chapter 13 bankruptcy. If you choose to file for bankruptcy without an attorney, it is essential to extensively research you state’s exemption laws in order to ensure that you are:
- Not putting any of your property at risk by filing for bankruptcy
- Utilizing the correct exemption system
Mistake #4: Failure To Follow The Local Procedures And Rules
On top of the federal bankruptcy laws, every court typically has its own unique set of procedures and rules regarding the steps you must follow in order to successfully complete your case and get a discharge. Failure to follow all the local court’s rules can definitely lead to delays in the entire process and/or dismissal of your case. To find out more information about the rules and procedures in your jurisdiction, visit your local bankruptcy court or even its website.
Mistake #5: Filing For Bankruptcy Unnecessarily
Generally, filing for bankruptcy is in your best interest depending on:
- Your individual circumstances
- Your expenses and income
- The amount of property that you own
- The specific types of debts you have
It is important to note that bankruptcy does not discharge or eliminate particular types of debts. These debts are known as nondischargeable debts. Consequently, it is highly prudent to ensure that bankruptcy remains the correct solution to the financial troubles you face before filing your case.
Mistake #6: Failure To Attend Your Meeting Of Creditors
Whether you are filing for Chapter 13 or Chapter 7 bankruptcy, it is mandatory to attend a hearing by the name meeting or creditors or 341 hearing. After filing your case, the court sends you a notice that indicates where and when your meeting of creditors will be. Failure to attend this meeting results in the court dismissing your case.
Mistake #7: Transferring Assets Prior To Filing Bankruptcy
The impression that you can transfer or sell assets before filing for bankruptcy is totally wrong. The good thing is that most local laws offer generous exemptions to debtors. Transferring or selling assets can be considered as fraudulent. It can lead to a recovery or reversal of the assets by a trustee if the transfer is deemed as fraudulent.
In any bankruptcy case, minor mistakes can turn out to be highly costly. Even the most inadvertent mistakes can come in the way of keeping your exempt property and discharging certain debts. Avoid the above seven mistakes when filing for bankruptcy to enjoy all the benefits.