If you are thinking about filing bankruptcy, below are some common mistakes that people make that can create problems during their bankruptcy process:
- Running Up Credit Cards – Any purchases or cash advances made with credit cards within 90 days of filing bankruptcy are red flags for creditors and could lead them to fight the discharge of these debts.
- Repaying Family Members – If you repay family members before you repay other creditors, the bankruptcy trustee can require those family members to surrender any payments you made to them within the year before you file bankruptcy.
- Cashing Out Retirement Accounts to Pay Debts – Retirement accounts are generally exempt in bankruptcy, meaning that the trustee can not require you to cash them out to pay your creditors. If you cash out your retirement account to try and hold off on bankruptcy, all you have done is drain your retirement account.
- Transferring Property Out of Your Name – You will have to disclose any property, real or personal, that you have transferred during the two years before you file bankruptcy. If the trustee believes you transferred the property to defraud creditors, the trustee can cancel the transfer. In addition, you may face an adversarial proceeding by the creditor to make sure that a debt is not discharged.
- Failing to Appear at Court – It is crucial that you show up to any court proceedings, whether in bankruptcy court or civil court. If you don’t, you risk being found liable for debts that you may not owe and could have your bankruptcy case dismissed.
- Lying to Bankruptcy Counsel – The biggest mistake you could make in filing bankruptcy is not telling your bankruptcy lawyer the truth. If you try to hide anything from her, you could have your case dismissed or be prosecuted for lying on your bankruptcy petition. Your bankruptcy attorney is there to guide you safely through the bankruptcy process. She can only do so if you tell her everything.
If you are interested in filing a chapter 7 bankruptcy, contact the Law offices of Chirnese L. Liverpool at (818) 714-2200.