Mistakes People Make When Filing For Bankruptcy

Written By: Emil FleysherFebruary 7, 2022

Filing for bankruptcy can be hard on you and your financial situation. It can be challenging to admit that you made some misguided money decisions that snowballed out of control. And, that now you need help getting out from under some debt. Or maybe you are overwhelmed by medical bills or lost your job unexpectedly and can no longer pay off your debt. However you got to the point of needing to file for bankruptcy; it can be difficult to navigate and you may be tempted to do things you think will help your situation. Unfortunately, people will often make damaging mistakes that can have their bankruptcy case denied. The best thing to do is to contact an attorney who specializes in bankruptcy and can guide you through the process. You may think you are doing the right thing, but below are some of the worst and most common mistakes. 

Hiding Your Assets

You may want to protect certain assets and think transferring them to your family or friends is the solution. Not only is this not the best route to take, but it is also illegal and can have your bankruptcy case completely thrown out. You can also face jail time and fines for transferring and hiding assets. 

Not Listing All of Your Creditors

While you may feel overwhelmed filing for bankruptcy, you have to keep all of your documents in order. You may have your documents chaotically spread everywhere and forget to list one of your creditors. While this is an oversight, other debtors will intentionally keep certain debts out of their bankruptcy filing. The law requires you to include all creditors in your bankruptcy case. Even if you plan to pay the creditor later, you must still provide this information to your attorney when filing for bankruptcy. 

Going on a Spending Spree

Many debtors make a big mistake when filing for bankruptcy by maxing out their credit cards and making large purchases. When you decide to go down the bankruptcy route, you should stop using your credit cards. Any purchases that were made that seem frivolous or significant may not be included in the bankruptcy and you will be held liable for them. 

Paying Family and Friends 

During your hard times, you may have relied on family and friends to give you a loan that you had every intention of paying back. If you attempt to pay these loans back before filing for bankruptcy, the court can look at them negatively. Moreover, the court may even have your family and friends give the money you paid them back. Be upfront and honest with your bankruptcy attorney about any loans you took out; even if they were from family or friends. 

Waiting Until the Last Minute to File for Bankruptcy

The need to file for bankruptcy and the inability to pay your debts develops over time. This is not an overnight situation. Therefore, when you realize you cannot keep up with your obligations and are considering bankruptcy, you should meet with an experienced bankruptcy attorney. When debt becomes delinquent, it can quickly go to collections. And, when you don't handle collection accounts, it can turn into wage garnishments. This can make you less attractive to creditors and they may be less willing to work with you during a bankruptcy case. 

Contact The Law Offices Of Emil Fleysher Today 

We understand that bankruptcy can feel like a maze that is impossible to solve. This is why you need to contact The Law Offices of Emil Fleysher, P.A. about your situation. We can help you get through the process of filing for bankruptcy and will work diligently to get you back on track and put this behind you. Contact us online or call our office at 888-886-0020 to schedule a free consultation today.

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