So you’re fed up with the collection calls and ready to seek your financial freedom. That means it’s time to file for bankruptcy. When you choose to file for bankruptcy, it takes much more than just filling out the endless amounts of paperwork. There is a lot more preparation that takes place. You will need to make and execute a plan in order to have a successful bankruptcy filing. What a lot of people don’t understand about filing for bankruptcy is that if not handled correctly, the process can have a severe and irreversible impact on your financial future.
Our experienced attorneys at Amerio Law Firm have provided some things to avoid while beginning the bankruptcy process:
Providing wrong, unfinished or untruthful information
When filling out your bankruptcy paperwork, you are required by law to provide complete and accurate information to the best of your knowledge about all of your assets, debts, income, expenses and financial history. You do so under penalty of perjury. This means that if proven that you knowingly misrepresented your information when filling out the paperwork (for example, you failed to disclose an asset) you could be subject to criminal prosecution.
Racking up even more debt
If you’ve found yourself running up more credit in the 70 to 90 days prior to filing bankruptcy, it is possible your creditors will try to object to your discharge. It may argue that you took out the loan without any intention of paying it back (which is commonly known as fraud) and that you should not be allowed to discharge that debt in bankruptcy.
Moving your assets
Bankruptcy schedules typically require that you provide all information on assets that you own (or will own) at the time you choose to file for bankruptcy. This can be intimidating and scary, however, do not be tempted to sell, transfer for protection, or hide assets before filing bankruptcy. Doing so may result in being denied a discharge and in serious cases, can even be subject to criminal penalties.
Selectively repaying your loans
If within about one year of filing, you pay back loans to friends, relatives, or even other creditors (within 90 days), then this may be considered a “preferential transfer.” It is possible for a preferential transfer to be “undone” in the bankruptcy process. What can happen is that the bankruptcy trustee may file an adversarial proceeding to get the money back from the person or entity to whom you preferentially transferred the money. They will then choose to disperse the money in equal shares amongst all of your creditors with no preferential treatment.
Ignoring impending collection actions
If you are intending on filing for bankruptcy, your creditors most likely do not know your actions or what you are choosing to do. If a creditor has obtained a judgment against you, it may be in the process of garnishing your wages, attacking your bank accounts, repossessing your car, or even in serious cases, foreclosing on your house. It is important to advise them as soon as you possibly can of your intention to file bankruptcy. If you hire a bankruptcy attorney from Amerio Law Firm, we are sure to provide the information needed to stop any attempts to take your property, including copies of any garnishment notices. While in most cases a creditor would have to return property it inadvertently seized after a bankruptcy was filed, it can create a costly legal headache, which you should avoid if at all possible.
If you are ready to take the next step towards financial freedom, please call Amerio Law Firm at (916) 419-1111 today.