Common Bankruptcy Mistakes to Avoid

When filing for bankruptcy, there are many missteps you can make along the way, which is why you should have a bankruptcy attorney take care of all the paperwork for you. This is vital since the bigger mistakes could disqualify you from being able to file bankruptcy at all. What are some of these mistakes?

Running Up Your Bills Before Filing Bankruptcy

This is one of the biggest mistakes people make before filing for bankruptcy. They want to use all their available credit, but if your creditors believe that you’ve done this, they can challenge your request to file bankruptcy. 

Transferring Property

Another thing that could throw a red flag when you’re filing bankruptcy near Clearwater is if you were to transfer property immediately before doing so. This is illegal since all your valuable assets must be included in your petition. At the very least, they should be listed as a liability therein. If you owe any money on these things, your bankruptcy attorney may be able to help you retain possession of them, especially if you file Chapter 13, as this is a repayment plan.

Hiding Assets

Another big mistake that people make when filing for bankruptcy near Clearwater. This is because you’re essentially lying to the court so that you can prove to them that you can’t pay for your outstanding debts. In Chapter 7 bankruptcy, your bankruptcy attorney and you will work with the court to sell these assets so that you can repay your creditors. It’s important to be prepared to do so before filing for bankruptcy. 

Using Retirement Money

You don’t ever want to tap into any retirement savings accounts that you have near Clearwater in an attempt to pay off your debts prior to filing for bankruptcy. This is important because these accounts may actually be exempt, meaning that they can’t be seized by the Trustee or your creditors. Therefore, you shouldn’t take any money out of them to try to cover your existing debts.

Picking the Wrong Chapter

You’ll want to work with your bankruptcy attorney to determine what type of bankruptcy is right for your situation. Choosing the wrong type of bankruptcy near Clearwater could make the process longer than necessary, especially if you file Chapter 13 instead of Chapter 7. This is because, with Chapter 13, you must undertake a 3 – 5 year reorganization plan.

Taking on New Debts

Any responsible bankruptcy attorney will tell you that once you realize that you’re overwhelmed by debt you can’t pay, you should immediately stop taking on new debt. If you’re already in debt, it doesn’t make sense to continue spending more of the money that you have available on your credit cards. This will only incur additional debt that you won’t be able to pay for and show the courts that you aren’t financially responsible.

Waiting Too Long to File

You should wait too long before choosing to file for bankruptcy near Clearwater. This is important because the longer you wait, the more money you’ll owe your creditors. By making the choice to start working on your bankruptcy plans immediately, you’ll be able to save yourself more money in the long run.

Not Getting the Help You Need

Weller Legal Group, near Clearwater, FL, is a highly reputable law firm that specializes in bankruptcy law. With over 20 years of experience, their team of skilled bankruptcy attorneys is dedicated to providing personalized and effective legal solutions to individuals and businesses facing financial difficulties. They have a proven track record of success in helping clients navigate through the complexities of bankruptcy and achieve a fresh start. Whether you are considering Chapter 7 or Chapter 13 bankruptcy, they’re committed to guiding you through the process and helping you regain control of your financial future.