Dos Before and Don’ts After Bankruptcy Filing
People filing for bankruptcy look for ways out. There are legitimate ways to retain most or some of your assets after the bankruptcy gets settled. Nevertheless, errors happen because bankruptcy filing is a complicated process. Mistakes create complications, which can get your bankruptcy form to get denied. If your bankruptcy gets deemed as a sham then you can get stuck with criminal charges.
Understand consumer bankruptcy types
You need to get familiar with what occurs during bankruptcy. Chapter 7 & 13 are the two main kinds of consumer bankruptcy. The former gets completed fast and helps to eliminate all or the majority of your debts.
If you don’t qualify for Chapter 7 then Chapter 13 is another option. You can consolidate payments and repay debt across a 3 to 5-year period. It helps to stop the harassing letters and calls from creditors. After the payment plan gets completed, dischargeable debts included in the plan will get eliminated.
The experienced and skilled Toledo bankruptcy lawyer understands the financial distress his client experiences. Even people with good intentions can find themselves in troubled waters. Bankruptcy needs to get filed correctly to protect the debtors from the creditor’s nuisance. You can book a free consultation with Groth & Associates for legal guidelines associated with your financial problem.
Dos before a bankruptcy filing
Take legal help as soon as possible
Consultation with a lawyer to discuss your financial problem will help you get the needed advice and how to approach it. Waiting until the last moment can limit the available options.
Always be truthful with your bankruptcy lawyer. Disclose everything associated with your financial issue so it can get handled correctly. The information shared with a lawyer stays confidential. In case there is information that needs disclosure, then the lawyer will ask you.
Lawyer-client confidentiality protects you from releasing unwanted information. E.g. if you own a paid-off property you desire to keep, then the lawyer will tell you whether you need to disclose this information or not. Withholding information back can get you penalized for perjury.
Do establish a budget
The bankruptcy lawyer’s team will assess and prioritize your spending money. It is the first step in improving your finances post-bankruptcy. Stick to the plan, and you will see the benefits down the road.
Disclose large investments made in the last three months before filing for bankruptcy
If you ignore, the court may assume this act as fraud and deny your bankruptcy discharge.
Don’ts after a bankruptcy filing
- Never transfer property into someone else’s name, which seems like you are hiding purposefully or misleading your creditors.
- Never pay a single creditor because the court can consider it to be a preferential transfer. The creditor can get sued later for money recovery.
- Never run up a new debt like taking a loan or a new credit card. Debts within 6 months will be looked at closely, and if they are not for necessities, then your discharge will get refused.
- Never leave any creditors from bankruptcy petition because it is deemed as a sham resulting in penalties.
Before you file bankruptcy learn what to do and what to avoid. It will help you get through the complex bankruptcy process with ease.