Bankruptcy is a legal process that can help you get rid of your overwhelming debts and start fresh. However, it is not a simple or easy solution. There are many rules that you have to follow, and many pitfalls that you have to avoid. If you make a mistake when filing for bankruptcy, you could end up losing more than you bargained for, or even face criminal charges. That is why it is crucial to consult with a qualified and experienced Bergen County bankruptcy lawyer before you file. The Law Office of Boyd & Squitieri is here to protect your interests and help you avoid some of the most common bankruptcy mistakes that could cost you dearly. Read on for more information.
Five Important Bankruptcy Mistakes to Avoid
Here are five of the most important bankruptcy mistakes that you should avoid at all costs:
Lying or Hiding Information
When you file for bankruptcy, you have to disclose all of your assets, income, expenses, debts, and financial transactions to the court. You also have to provide supporting documents, such as tax returns, bank statements, pay stubs, and bills. If you lie or hide any information, or fail to provide the required documents, you could face serious consequences. The court could dismiss your case, deny your discharge, or even charge you with fraud.
Transferring or Giving Away Assets
Some people may think that they can protect their assets from bankruptcy by transferring or giving them away to their friends or relatives before they file. This is a big mistake. If you do so and the bankruptcy trustee finds out, you could lose your right to a discharge or face fraud charges.
Running Up New Debts
Another common mistake that people make before filing for bankruptcy is running up new debts on their credit cards or taking out new loans. They may think that these debts will be wiped out in bankruptcy anyway, so they might as well enjoy themselves while they can. However, this is not true. Any debts that you incur within 90 days before filing for bankruptcy are presumed to be fraudulent and non-dischargeable. This means that you will still have to pay them back after your bankruptcy case is over. Moreover, if the creditor can prove that you incurred the debt with no intention of repaying it, you could face criminal charges.
Paying Off Certain Creditors
Some people may feel obligated or pressured to pay off certain creditors before filing for bankruptcy, such as family members, friends, or business partners. They may think that this will help them preserve their relationships or reputation. However, this is also a mistake. The bankruptcy trustee can undo any payments that you made to certain creditors within one year before filing for bankruptcy. This is called a preference payment, and it is considered unfair to other creditors who are not paid in full. If the trustee recovers a preference payment from a creditor, you could lose your relationship or reputation with that creditor anyway.
Filing Without a Lawyer
The biggest mistake that you can make when filing for bankruptcy is filing without a lawyer. Bankruptcy law is complex and confusing, and there are many forms and procedures that you have to follow correctly. If you file without a lawyer, you could make errors or omissions that could jeopardize your case or your discharge. You could also miss out on important exemptions or options that could save your assets or reduce your debts. A lawyer can help you avoid these mistakes and maximize the benefits of bankruptcy for your situation.
If you are considering filing for bankruptcy, don’t make these costly mistakes. Contact the Law Office of Boyd & Squitieri today for competent guidance through each step of the process ahead.