If you’re expecting a difficult financial situation to come to you, it might be tempting to do whatever he can to alleviate the financial pressure they are currently facing. You might be entitled to receive a bankruptcy discharge that wipes out your debt so that you can qualify for future financial products. If you’ve never considered bankruptcy before, it’s important to know more about the process and what you should not take on before you consider filing for bankruptcy. Here’s what not to do before the bankruptcy application process.
Don’t Rush Into The Process
Bankruptcy works particularly well at wiping out your debt if you qualify. You can receive a chapter 7 bankruptcy discharged once every eight years or six years after you filed for chapter 13 bankruptcy. If you’ve recently filed for bankruptcy, it’s advantageous for you to avoid the records of the application process for some time after your initial application. If you’re unable to file for bankruptcy, you might find yourself facing other financial difficulties like eviction, car repossession, foreclosure, and more. Reaching a state where your finances are more stable might qualify you for chapter 13 bankruptcy. During this type of bankruptcy, you will be allowed your base living expenses and then have a repayment period over 3 to 5 years to pay back your creditors.
Don’t Wait Too Long Have A Failure To File Damage Your Credit
Sometimes it can be in your best interest to file for bankruptcy soon as possible. If you’re already facing wage garnishment and you are paying down bills, it’s a good idea to handle early fraud allegations and to work at applying for bankruptcy as soon as possible. If a creditor wins the chance to garnish her wages or attach themselves to your bank account assets, you could lose control over your valuables. Bankruptcy offers limited protection against liens and the chance that assets could be seized may be less complicated for you to consider filing for bankruptcy rather than letting creditors start to seize your belongings.
Don’t Drain Out Your Retirement Account
It can be very tempting to drain some of your retirement accounts in order to pay for your debts. You can protect most of your retirement savings in the event of bankruptcy and it’s most unfortunate when people drain out their retirement accounts in order to pay off creditors only to end up filing for bankruptcy later on. Before paying off any of your bills by draining out a registered retirement account, seek the advice of a knowledgeable bankruptcy attorney before you deplete retirement funds.
Don’t Provide Dishonest Information
If you’re going to be applying for bankruptcy make sure that you complete the full paperwork. This includes disclosing your entire income, assets, expenses, whatever financial history you can provide, and a full list of your debt. Failing to disclose any asset and certain details in your bankruptcy could result in criminal penalties which included years in prison and fines up to $250,000.
If you don’t file all the paperwork a bank up to coordinate decides to dismiss your case or ask for you to file additional papers in order to correct the initial filing that you sent in. This can mean that you may be forced to pay the costs of bankruptcy again.
Providing dishonest information in a chapter 7 bankruptcy filing could mean that the trustee will seize the property that you did not disclose. The government will investigate bankruptcy crimes and sometimes the FBI can get involved so it is usually best to disclose all information for your case.
Try To Minimize Your New Debt
If you plan on taking out a new credit card 70 to 90 days before filing for bankruptcy, your creditor may objectively discharge. If you took out a loan without any intention of paying it back, this is considered a presumptive fraud and you may be charged for the debt without forgiveness.
Don’t Move Around Assets
Under any bankruptcy, you will need to provide information about the assets you own. It could be very tempting for you to sell off your assets and put the money into safekeeping or hide assets through the process of filing for bankruptcy. The risk is not worth the perceived reward and if you’re planning on selling property or selling off your assets and funneling the money into your retirement savings are giving it to a family member, you could face fines or penalties.
You Can’t Selectively Repay Creditors
If you pay back loans to your friends or relatives instead of creditors involved in your bankruptcy, the transfers can be undone. A trustee will be responsible for paying your creditors and if you paid off a personal loan rather than paying down credit card debt or medical debt, the trustee could sue the keeper of the personal loan to get the money back.
Keep these top ideas in mind if you are considering filing for bankruptcy. Remember that you can work at establishing a plan for your bankruptcy by speaking to a bankruptcy attorney. To talk to a bankruptcy attorney contact us today.