The bankruptcy mistakes every debtor should avoid

The bankruptcy mistakes every debtor should avoid

When filing for bankruptcy, you should work hand in hand with your attorney to learn about the entire process to make it stress-free. For your case to run smoothly, you must avoid some costly mistakes that can cause serious repercussions. Avoiding the following mistakes can keep you from being on the wrong side of the law.

Signing documents without reviewing them

You have to file a lot of documents in court detailing all your debts, assets, expenses and income when filing for bankruptcy. You will have to sign other documents issued by the court. Take time to review each document to avoid giving inaccurate information. Lying can make you lose your discharge or even future assets.

Withholding information

If you hire a bankruptcy attorney, you have to disclose all the relevant information regarding your assets while filing for bankruptcy. Make sure they have all the relevant documents, facts and figures to help you ease the process. Withholding certain information can be taken as a breach of the law and can land you into serious problems. Apart from your lawyer, your trustee may still need additional details. Do not ignore their questions or obstruct them from doing their jobs since you can be prosecuted for such.

Failing to meet with your creditors

As a debtor, you should prioritize meeting with creditors. If you get caught up and cannot attend the meeting in person, inform your lawyer beforehand so that they can represent you. Some creditors allow you to participate in the meeting through telephone if you are out of the country or away for work. Do not however make it a habit of not attending these meetings.

Concealing assets

This is a common mistake that most people who file for bankruptcy get prosecuted for. Concealing assets when filing for bankruptcy is a crime. If you hide some of your assets or organize to transfer them to someone else during the process, you can receive a fine for it or even get detained.

Filing different cases

People look for different ways to prevent their property from being repossessed. It is, however, a mistake to file multiple cases since the court works with limits. For instance, a person may file for bankruptcy to prevent creditors from foreclosing their home. The first time, the court can consider preventing creditors from repossessing the house. If the person fails to make repayments and faces foreclosure again, they may file for bankruptcy for the second time. In this case, the court may fail to consider the person’s automatic stay request.

Neglecting your debtor education course

If you are a debtor with a case in chapter 13 or 7, you are supposed to take an education course before the court issues a discharge. Failure to take the course can make the court dismiss your case without issuing the discharge. To reopen the case, you may incur extra fees of paying your attorney and also the court. To avoid this, make sure you take the course to get your discharge.