Mistakes People Make When Filing for Bankruptcy in California
Bankruptcy is a difficult process for many to fathom and work through. There are so many facets, that it can be hard to determine what the next step is, and to go through the process and come out better on the other side. There are some common bankruptcy mistakes that filers tend to make that can affect the outcome.
Using the Wrong Funds to Pay the Debt
Though it might seem like a great idea to use a home equity loan or a retirement fund to pay down your debt, you should avoid this bankruptcy filing mistake. If you are all set on filing for bankruptcy, you should allow your attorney to help you file for full bankruptcy and have your debt dismissed in the proceedings rather than try to pay it down with other funds. Retirement funds are something you will need in the future, and a home equity loan can put you further in debt.
Transferring Assets Before Filing
Any sensible bankruptcy lawyer will strongly caution against doing something that might make you look suspicious or that might make it seem like you are doing anything under the table related to the bankruptcy filing. It will look like you are not being honest and tampering with the facts if you are transferring your assets before you file for bankruptcy. Evidence of hiding assets or moving them is a big mistake and can lead to your bankruptcy being denied and even to further charges.
Omitting Assets From Paperwork
Your paperwork needs to be full and accurate. It means that you should include every single asset- big or small that you have. Concealing assets can lead to your bankruptcy being denied. It can lead to further problems with your creditors, and even to seizing things. Also, creditors can come back against you if you are making this bankruptcy filing mistake.
Running Up Debt Before Filing
Any suspicious activity before filing for bankruptcy is going to be noted and well documented in your proceedings. In some cases, you are required to show your records and your credit card invoices. If you run up your credit card limit before you file, the judge is going to know that you are attempting fraud. It can lead to your bankruptcy request being denied and, it can lead to you paying back all your debts.
Filing Without a Lawyer
Though you might think that you can file on your own, it is far more effective to hire a bankruptcy lawyer. S/he will make the process a lot easier by helping you to file for bankruptcy successfully without any mistakes. To get your paperwork filed correctly, a lawyer will ensure that you are including everything you need to file and not leaving anything out. A lawyer is also going to double-check all the paperwork and other important facts. They will make sure that your bankruptcy procedure follows all the legalities and that you have not missed any debts, assets, or other items that should have been listed in your bankruptcy documents.
Choosing the Wrong Bankruptcy or Filing Too Late
If you feel that you might need to file bankruptcy it is best to talk to a lawyer as soon as it hits you, rather than waiting. Waiting can lead to more debt and stress and you should definitely avoid this bankruptcy filing mistake. You should talk with a lawyer as soon as you have a concern so that they can guide you if it is the right time, and what type of bankruptcy will work best for your needs and financial issues. Though you might do a quick search about the bankruptcy types, a lawyer can better help you determine which one is going to work best and how you should proceed to get the best overall outcome.
Adding to Your Debt Before You File
You should stop spending and try to freeze your debt before you file. Any activity that is out of the norm or that appears to be suspicious can lead to your request being denied. You won’t want to make any such bankruptcy filing mistake that can lead to more problems. When you decide to file, you should not spend any more money and keep your credit debt at a steady level.
Transferring your property to your family members or friends is a huge red flag and will most likely lead to your bankruptcy request being denied and even lead to charges of potential fraud. It sometimes misunderstood that bankruptcy takes away your properties. In fact, you can keep some assets in bankruptcy, and your bankruptcy lawyer in California can help you better understand what you can have and what you must get rid of.
Withholding Information Concerning Debt and Assets
Bankruptcy is something that is very open and that you must share everything about. If you are filing for bankruptcy in California, you should take the time to gather all the information about your assets, the debts you are working to get rid of, and more. You need to be transparent with your lawyer and his/her team to get the best possible result out of your bankruptcy case.
Filing Too Close to a Major Life Event
When your life is already in turmoil or when you are already going through tough times, it may not be good to add the stress of filing for bankruptcy to your plate. You should try to avoid filing if you are going through any major life stressors. Taking the time to consider when to file can make the process easier and lets you focus on bankruptcy completely.
No matter why you are filing, you must avoid these common bankruptcy filing mistakes. A lawyer can make the process simpler and faster, and help you have a successful bankruptcy.