Filing for bankruptcy is an act that should not be taken lightly. With that being said, you should try to avoid making any mistakes that may jeopardize your opportunity for financial relief. Follow along to find out the common mistake made during bankruptcy and how a proficient Louisville, Kentucky consumer bankruptcy lawyer at Schwartz Bankruptcy Law Center can help you detour from them.
What are examples of mistakes commonly made before bankruptcy?
Even before you file for bankruptcy, you should ensure that you are making the right moves. For one, you should not pay back friends, family, coworkers, or otherwise within one year of filing. This is because a Chapter 7 bankruptcy trustee will likely attempt to recover these repayments and consider them preferential payments.
Also prior to filing, you should avoid transferring your home and your other assets out of your name. You are sadly mistaken if you believe that the bankruptcy court will not go after your assets that were once in your name and undo them. Rather, they will consider this a fraudulent activity. If you, instead, hold on to these assets, they may just have the opportunity to be protected by creditors during your proceedings.
What other mistakes should I avoid?
There are many other mistakes you should avoid before entering your bankruptcy proceedings. Just some examples are as follows:
- Participating in large amounts of credit usage within approximately 90 days before filing.
- Applying for additional lines of credit to pay off creditors before filing.
- Cashing in or taking out loans from your retirement account to pay off creditors before filing.
- Taking out a second mortgage on your home to pay off creditors before filing.
- Failing to appear at collection case proceedings before filing.
Overall, one of the most significant mistakes that you should avoid should be delaying getting legal help. Understandably, admitting that you have a debt problem is difficult to do. But the sooner you confront your financial issues, the sooner a talented Louisville, Kentucky consumer bankruptcy attorney can get you out of this situation. Once you retain our legal services, we encourage you to tell us the whole truth surrounding your financial situation. Meaning, do not hide any assets from us. It would be a mistake to do so, as this may lead to serious consequences like the following:
- You may lose the assets that you were making an effort to hide.
- Your bankruptcy claim may be denied.
- You may be sentenced to pay hefty fines, in addition to paying off your debts.
- You may be sentenced to imprisonment.
We look forward to helping you achieve financial stability. So, as soon as you can, reach out to our firm today.