In today’s economic climate, personal bankruptcy is climbing quickly. Even more alarming, the vast majority of bankruptcy filings with the United States court system come from individuals and not corporations. While there is a perception that many people file for bankruptcy because they have mismanaged their finances, the reality is that this is not the case. There are numerous reasons why people go bankrupt; however, the most common is due to unpaid medical expenses. A recently study that was published by Harvard University showed that more than 60 percent of people who file for personal bankruptcy do so because of medical bills. The majority of these individuals even had health insurance.
Therefore, if you are thinking about filing for bankruptcy, please know that you are not alone. In addition, there are five common mistakes that you should avoid. This will make the process of filing for bankruptcy easier.
Forgetting To List All Creditors
If you are trying to deal with a large amount of debt, this can feel like a chaotic situation. You might even feel overwhelmed. This means that information about your creditors can get lost in the shuffle. You might even want to keep certain creditors out of your bankruptcy case; however, under federal law, it is a requirement that you list all of your creditors. This is true even if you have the intention of paying a creditor back. If you do not list certain creditors, then the debt you owe them might not be discharged in bankruptcy, which would be a serious mistake.
When you file for bankruptcy, you will be asked to list your assets. If you have an extra bank account or attempt to transfer large sums of money to a relative, this is against the law. Do not try to hide assets when you file for bankruptcy. This can jeopardize your chances of discharging certain debts. Furthermore, you could end up facing large fines or even prison time. Therefore, do not try to hide your assets. Make sure that you honestly declare everything that you still have. Bankruptcy fraud is a serious offense.
Paying Back Family Members Before Filing for Bankruptcy
If you owe money to creditors, you might owe money to family members as well. This can be an especially difficult subject for individuals who are filing for personal bankruptcy. You might not want to discharge loans to family members; however, if you pay back loans to family members before other creditors, this could be seen as preferential treatment. Therefore, the courts might disallow these payments. This means that your family members will have to return the money you paid them. It is better to let the courts resolve these issues.
Going on a Shopping Spree
You might think that you’re going to file for bankruptcy so you might as well spend your money and run up your credit card bills. This is a huge mistake. If you make large purchases using your credit cards before you file for bankruptcy, the courts will see through this tactic. Therefore, they might refuse to discharge these debts. As soon as you realize that you cannot keep up with your credit card payments, stop using them.
Waiting Too Long Before Filing for Bankruptcy
If you owe money to other people or creditors, this can snowball out of control quickly. Your delinquent bills could end up going to collections, which might end up as wage garnishments. This can make your financial situation even worse. Do not let this happen. The longer you wait, the bigger the drain will be on your finances. Therefore, as soon as you realize you cannot pay back your debts, it is time for you to explore your bankruptcy options.
Individuals who are considering filing for bankruptcy must know that their rights are protected. One of their most important rights is the right to an attorney. While you might be tempted to represent yourself in an effort to save money, this is not always a good idea. Regardless of whether you are considering filing for Chapter 7 or Chapter 13 bankruptcy, you need to hire an attorney who can protect you and your assets while also providing you with an opportunity for a fresh start.
Skilled and Experienced Debt Relief Lawyers in the Local Area
Our experienced bankruptcy attorneys understand that if you have serious financial problems, this can impact every part of your life. The stress and anxiety of mounting bills can lead to relationship issues with family members, friends, and even work colleagues. In some cases, debt issues might even impact your health.
The good news is that you do not have to face these debt issues by yourself. Our experienced attorneys have already helped countless individuals through the process of finding debt relief, leading to a brighter future. Many people are able to protect a significant portion of their assets as they seek a new beginning. This includes being free from a constant stream of bills, harassment from creditors, and financial stress. Allow us to act as your legal guide through the constitutionally protected process of discharging your debt, allowing you to regain your financial health and rebuild your credit.
Why You Should Hire a Bankruptcy Attorney
There are several big reasons why you should hire a lawyer to represent you in any bankruptcy filing. These include:
- First, a trained lawyer will be able to take a look at your case and anticipate any issues that might arise, allowing you to plan in advance.
- Second, an experienced attorney will be able to look at your financial situation and consider alternatives to filing for bankruptcy. Filing for bankruptcy is not the only way to improve your financial health. There are alternatives that could be appropriate.
- Third, a bankruptcy professionals can help you decide which bankruptcy is most appropriate for your case. Chapter 7 can wipe out a lot of your debt; however, it might not save your house. Therefore, Chapter 13 could be better for some people.
These are a few of the most important benefits that people should know about hiring a lawyer for bankruptcy filings.
Preparing for Bankruptcy with a Lawyer
When you enlist the help of an experienced bankruptcy professional, you will work with your lawyer to prepare your case. Some of the steps involved in this preparation include:
- Applying the means test to figure out whether or not you qualify for Chapter 7 bankruptcy
- Valuing your property in an honest and realistic manner to ensure that nothing is overlooked
- Choosing and applying exemptions to protect as much of your property as possible
- Making sure that as many of your debts are discharged as possible
Properly preparing for any bankruptcy case is a critical part of obtaining a fresh start financially.
Contact Us Today to Learn More About Our Services
If you are considering filing for bankruptcy, you need the help of an experienced bankruptcy lawyer. We are here to listen to your case with judgment or reservation. We know that everyone’s financial circumstances are different and we are here to help you with yours. Remember, you do not have to face this situation alone. Call us today to learn more about how our bankruptcy lawyers can help you gain a fresh start.
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If you are looking for help with your financial situation, then personal bankruptcy could be a good path for you; however, we will review all of your options with you. Give us a call today! We are here to help you!