Common Bankruptcy Mistakes Everyone Should Avoid in Franklin County, Ohio
If you're having financial difficulties but still want to maintain some assets, filing for Chapter 13 bankruptcy may be your best option. Alternatively, you may be able to discharge everything in Chapter 7 and move on more quickly. Regardless, the bankruptcy you choose to go with, some mistakes can result in you not receiving a discharge. Below are some of the most common mistakes you should watch out for and avoid making.
1. Accumulating Debt Before Filing
Among the most common mistakes is piling up debt and exhausting all available credit before filing for bankruptcy. This is because creditors can legally contest your request to discharge the debt if they have evidence that you intentionally incurred debt before filing for bankruptcy and the charges were incurred within 90 days of filing.
2. Property Transfer
Trying to safeguard your property by transferring it is unlawful and doesn't sit well with the bankruptcy court or your creditors. Transfers of assets to family members within 4 years of the filing of the petition can be undone by the bankruptcy Trustee. Include all of your valued possessions in your bankruptcy petition so that you can accurately assess whether they qualify as assets or should be classified as liabilities.
3. Hiding Wealth
Failing to disclose all of your assets is a major mistake. You need to show the court that you cannot pay your bills as they currently stand, but concealing your wealth might severely damage your chances of receiving financial relief. If you have assets that are not exempt, you should consider a chapter 13 bankruptcy.
4. Spending Your Retirement Funds
It's a bad idea to use retirement funds to settle credit debt before filing for bankruptcy. This is because your retirement savings may be exempt from creditors when you file for bankruptcy.
5. Choosing the Wrong Chapter
Selecting the wrong chapter can prolong the bankruptcy petition, so it's advisable to work with a competent lawyer to help you choose the bankruptcy that best suits your situation. Chapter 13 features restructuring plans that usually take three to five years. However, if it's more reasonable to liquidate your assets to pay off your debts, you should go with Chapter 7.
Having an expert bankruptcy attorney on your side is the best way to defend yourself while you go through the bankruptcy filing process. If you do this, you may avoid the mistakes outlined above and start working toward financial independence right away. If you are ready to take the next step, please don't hesitate to contact us.