Common Mistakes to Avoid When Filing for Chapter 7 Bankruptcy

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When filing for Chapter 7 bankruptcy, there are a lot of mistakes people often make. And it’s understandable. It’s an extremely stressful time. Debt is piling higher and higher. Creditors are calling. Wages might even be garnished. You can be desperate for a solution and rush into bankruptcy on your own.

Doing this without a Chapter 7 bankruptcy attorney can result in numerous errors.

 Failure to Hire an Experienced Bankruptcy Attorney

One of the most common mistakes debtors make is not hiring a bankruptcy attorney. Sometimes people might opt to file on their own or use an online form to help. While they might technically be able to file for bankruptcy this way, they are at risk of errors and not negotiating the best deal for themselves as the case progresses. Bankruptcy cases are complicated, and you can benefit from hiring an experienced professional. An attorney can help you avoid costly mistakes, explain all of your options to you, determine if you’re eligible to file for Chapter 7, assess which property can be marked exempt, help complete all of the paperwork – and file it on time.

 Not Disclosing Financial Information

You need to provide complete, accurate, and honest information about your assets. Failing to disclose information can have serious consequences – and may even result in a denial of discharge. In extreme cases, it can also result in criminal charges for bankruptcy fraud.

 Incur New Debts

Taking on new debt right before filing for Chapter 7 bankruptcy can result in significant issues in bankruptcy. The court will be looking to see if you took out large cash advances, or made large purchases in an attempt to avoid paying for them – knowing you were about to file for bankruptcy. These may not be discharged or create other obstacles in your path to being debt free.

Transfer Assets

Trying to protect assets or property of loved ones in an attempt to protect it during bankruptcy is not allowed. The courts will specifically look for transfers and may consider these to be fraudulent. For instance, if you transfer a vehicle to a family member (even if they paid for it) or even if you pay off a legitimate debt to a friend or family members in the times before bankruptcy, it could create problems for you and the family member. If you work with an attorney, they will advise you to fully disclose all assets and property.

 Not Taking Mandatory Credit Counseling Class

The court requires all individuals filing for bankruptcy to take a credit counseling class from an approved location. You will need to provide a certificate to show proof of completion. This class reviews how to manage your finances and explains what bankruptcy means for your financial future. Failing to complete a class can result in your case being dismissed.

 Not Meeting Deadlines

To properly file for bankruptcy, some deadlines need to be met. Certain paperwork needs to be completed by a specific date, and deadlines must be met to ensure your case proceeds on schedule and as planned. It can be hard to keep track of these deadlines on your own. A bankruptcy attorney can help keep you organized.

 Improperly Valuing Assets

You need to correctly value your assets when filing for bankruptcy. Overvaluing or undervaluing assets can come with severe consequences from the court. An attorney can help you accurately estimate the value of your assets and property and give the court the correct information.

Let Us Help You

To ensure you do not make critical errors with your Chapter 7 bankruptcy case, let our lawyers at The Law Offices of Alexzander C.J. Adams, P.C. help. We work for you, the people, and not institutions. Contact us for a free case evaluation, or no-obligation consultation. We are dedicated to helping you overcome this small bump in the road and assisting you to get on with your life.

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