All it takes is a series of unfortunate events to make you consider bankruptcy. Losing your job, being hospitalized, or even a divorce can leave you without much money and many bills to pay. It is true that bankruptcy can be a very effective way to eliminate all your debts, but you want to avoid making some mistakes along the way. In particular, these are 3 mistakes that can be made when you file for bankruptcy.
Not Listing Every Creditor
When filling out the initial paperwork for a bankruptcy filing, you'll need to list every creditor that you have, which includes the amount owed and the kind of debt that it is. Only those accounts listed on the paperwork are eligible to be discharged when the bankruptcy process is finished. If you do not list a creditor, it could be detrimental to you in a few ways.
For starters, creditors are notified once you make the list. When they receive their notifications, they must cease communication with you for the purpose of collecting your debt. Creditors that are not notified can continue contacting you. Those debts that are not listed will also not be discharged, making you still accountable for paying them even after your bankruptcy filing is successful.
Acquiring Any New Debt
After you decide to go down the path of filing for bankruptcy, taking on any new debt is not an option. This includes making big purchases or opening new lines of credit. If it is found out that you are doing these things while filing for bankruptcy, it can be argued that you only did it so that your old debts would not be repaid. The bankruptcy court may decide that you must repay old debts because of this.
Hiding Some of Your Assets
Bankruptcy under Chapter 7 proceedings requires that all your assets be documented, which includes personal property and real estate. This is because the courts can make you liquidate property that is non-exempt. If you decide not to disclose an asset so that it is not liquidated, your bankruptcy could be dismissed. It's not worth the risk when large assets can easily be discovered, so be sure to list all assets when filing.
If you want to make sure that you don't make a mistake when filing for bankruptcy, work with a bankruptcy lawyer like John D Rouse in your area. They can walk you through the entire process to make sure that you are doing everything properly.