Common Personal Bankruptcy Pitfalls to Avoid

One thing that none of us ever really plan to do is file for bankruptcy. Yet sometimes, when our bills become overwhelming and we don’t see how we can legitimately pay off all of our creditors, personal bankruptcy is really the best way to get a fresh start.

If this is something that you’re strongly considering doing, in order to make the process as smooth for you as possible, we wanted to provide you with a list of five common personal bankruptcy pitfalls that you should do your best to avoid.

Don’t forget to list all of your creditors and assets. The goal of filing personal bankruptcy is wiping out all of your debts. When this happens, it is known as a bankruptcy discharge. However, something that can prevent a discharge from happening is if you fail to list all of your creditors or disclose all of your assets. If this happens, it could put your discharge in jeopardy. So definitely make sure that everything is on there.

Don’t file right before a large tax refund. One huge mistake that a lot of people make is filing for a personal bankruptcy right before they are expecting a big tax refund. This could also cause complications with your filing. That said, if you do decide to file after receiving the money, just make sure that you discuss that with an attorney how you are planning to spend the money. By keeping them in the loop, they can help you to avoid running into problems when it comes to preference payments.

Don’t fail to provide all required documents. Something else that can hold up your personal bankruptcy filing is if you fail to provide all of the required information that you need. This would include your bank statements, your tax returns and your pay stubs too. It’s important that you double-check to make sure that you have all of these things ahead of time. You will not be able to complete your filing without them.

Don’t give money to family members and don’t use credit cards. If you were to speak with a bankruptcy attorney at a firm like Gentry, Arnold and Mitchell, PLLC about a mistake that people tend to make when filing for personal bankruptcy, one of the things that they would probably tell you is that there are some individuals who feel like they can “hide money” by giving large funds to a family member. However, if this is discovered, keep in mind that the money can be taken and given over to your creditors. Also, you should also know that you should not use credit cards when you’re about to file. You need to steer clear of doing anything that will incur more debt.

Don’t miss your hearing. Out of all of the tips that we offered, perhaps the most important one is that you definitely should not miss your hearing. If you do, not only could it result in your case being dismissed, but you also could end up being charged a certain amount of court fees in the process too. So, don’t forget to show up on time and to also bring your photo identification and social security number. That way, you’ll be fully prepared for your hearing. For more information on filing for personal bankruptcy, visit Consumer.FTC.gov and put “filing for bankruptcy” in the search field.