No doubt it is with a feeling of relief that you have decided to file for bankruptcy protection.
However, if you want the bankruptcy process to go smoothly, you must be alert to potential problems. Here are five mistakes you must avoid.
1. Failing to list all creditors
The law stipulates that you list all your creditors when you file for bankruptcy. Double-check to make sure you have not missed one. If you fail to list a creditor, your trustee may not discharge the associated debt.
2. Repaying family
If you owe money to someone in your family, do not consider repaying before you file for bankruptcy. Otherwise, your trustee may consider that a “preferential” payment and disallow it. As a result, your family member may have to transfer your payment to the trustee.
3. Going on one last spending spree
Going on one last big shopping trip or making a big purchase will not please the court. If you assume additional debt within 90 days of filing bankruptcy, the court may deny your petition.
4. Hiding assets
Do not fail to declare all your assets, such as the additional checking account you set up in your own name at another bank. The court could find you guilty of bankruptcy fraud and you could face heavy fines and time behind bars.
5. Delaying your filing
Once you decide to declare bankruptcy, do not delay since your debts will only continue to pile up. Rely on legal guidance to help you better understand the bankruptcy process, ensure you make no missteps and prepare you for a brighter, debt-free future.