Legal Guide

What Mistakes to Avoid While Filing for Bankruptcy?

First of all, it is important to understand that countless number of people find themselves in a serious debt situation. While it is always advised to take a credit amount that you can pay comfortably over time, there are times when you find yourself in such a difficult situation that filing bankruptcy seems like the most plausible option. But before you do that, it is important to steer clear of some common mistakes that debtors tend to make when filing for bankruptcy. Seeking assistance from an experienced bankruptcy attorney will help you avoid these common mistakes. What are those common mistakes? Let’s find out.

Not mentioning all the creditors

 It is not uncommon for debtors to feel overwhelmed when they are under a big debt. You may either forget to mention some key creditors in your bankruptcy case or intentionally want to keep them off the case. But as per law, it is mandatory for you to name every creditor in the case. So, do not make this mistake in your case.

Not providing all the bank account details

Another common mistake that debtors make before filing for bankruptcy is that they deliberately do not include their extra bank account if they have one. Some even transfer a good amount of money to their relatives. Doing both of these things is not at all recommended, as it can land you in legal trouble. You might have to pay fines, or you could land in jail for bankruptcy fraud. So, refrain from hiding your assets when filing for bankruptcy.

If you are thinking of filing for bankruptcy, then there are a number of bankruptcy lawyers serving the Braintree area who will advise you to seek help from an experienced bankruptcy attorney.

Paying the money back to family members

There are debtors who have to pay the money back to family members. They often do not wish to discharge those family loans in their case. So, if prior to filing your case, you pay back loan money to your family members, then these payments may get labeled as preferential by the trustee and might get disallowed. So, what does this actually mean? In these types of cases, the creditors or family members may be asked to give the money back to the trustee

Waiting for a long time

 Another common mistake that many debtors make is that they wait for a very long time to file for bankruptcy. While you should not file it right away, if you feel that it is virtually out of your hand to pay back your creditors, then you should not waste any more time. Debt is known for its snowball effect. So, do not take it lightly, as the consequences of your casual attitude can make things very difficult for you later on.

Only professional attorney knows everything about bankruptcy and will make the decision easier for you and help you get the best out of this financial decision.

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