Financial distress is something that more and more people are experiencing. It may be due to a recently-diagnosed medical condition that is costing tens of thousands of dollars in treatment to manage, or it could be due to being laid off from your job of 25 years. Whatever the case may be, if you have a significant amount of debt in your hands, bankruptcy may be something that you're considering. If it is, here are three mistakes that you'll want to make certain that you do not make:
1. Not Revealing All of Your Assets
When filing for bankruptcy, you must list your assets. This list should be an extensive one and include every single one of your assets. If you attempt to not disclose a certain asset, such as a boat or a four-wheeler, the courts will label you as dishonest. As a result, you may not be able to have your debts discharged.
2. Maxing Out Your Credit Cards
Debt from credit cards is one debt that is available for discharge when you file for bankruptcy. However, this doesn't mean that you should go out and have a huge shopping spree in the weeks leading up to your filing. In fact, you will likely be seen as a fraud for doing so. As a result, your credit card debt – and potentially the rest of your debt – will not be discharged by the court.
According to Nolo, if you take out a cash advance of over $925 within 70 days of your bankruptcy filing or purchase over $650 worth of luxury products and/or services within 90 days of your filing, fraudulent activity on your part is presumed. In many cases, you will need to prove that you did not act fraudulently intentionally.
3. Transferring Property Out of Your Name
Like using your credit cards, this can be extremely risky. You may have a piece of property that you would like to keep, so you transfer it to a family member. Even if it is a distant family member, if the court finds out, you could reduce your chances of having a successful bankruptcy, as this can be seem as fraudulent. It could also cause you to have to wait at least four years to re-file.
Every person's situation is different, so it is recommended that you speak to a qualified bankruptcy attorney about your circumstances. In some cases, when Chapter 7 bankruptcy isn't the most ideal option, Chapter 13 bankruptcy could be an appropriate alternative. An experienced attorney can help you understand the benefits and risks of each and help you make a well-informed decision that best suits your current situation. It may seem as if all hope is lost, but an attorney can and will help you determine what options exist. To learn more, contact a bankruptcy lawyer like Michael D Hart PC.