The bankruptcy process can be complicated enough. You don’t need to make mistakes before and during your bankruptcy which can make the proceedings take even longer. That’s why you should talk to a Bergen County Chapter 13 bankruptcy lawyer who can guide you through bankruptcy and tell you which actions to avoid before you file.
Why Should I Avoid Accumulating More Debt?
The first thing to avoid may seem obvious, but you would be surprised at how many people think that a bankruptcy filing gives them license to pile on more debt. You should avoid maxing out your cards or taking out additional loans. If you are thinking about filing for bankruptcy, the only things you should be putting on credit are the essentials.
If you rack up extra debt right before you file for bankruptcy, creditors are going to look at you suspiciously. They can credibly accuse you of fraud and that could get your case dismissed.
Why Should I Avoid Paying Specific Debts Before Filing?
Now this may seem odd, but you should also avoid paying off any debts. The problem is that any effort to pay off a specific debt could be seen as making a “preferential payment.” Pay off Creditor A before you file for bankruptcy, and Creditors B and C might say that this is unfair. If you had money, you should have paid all creditors an even amount.
The bankruptcy trustee for your case is likely to agree with this assertion. So keep your money and avoid making any large payments right before you file for bankruptcy.
Why Avoid Using Retirement Funds to Pay Off Debts?
Some people use retirement funds to pay off debts and then file for bankruptcy. If you have retirement savings, we cannot emphasize enough how important it is to avoid doing this. Your retirement account is likely safe from the bankruptcy process. That means that you can potentially file for bankruptcy, get your debts handled, and keep your retirement funds. Use them to pay off debts before filing or instead of filing for bankruptcy, and you will probably regret it.
Do I Really Need a Lawyer?
Even small mistakes can derail your bankruptcy proceedings. You need to be sure that you have all of the right documentation. You need to hit certain deadlines. Making an error can cause a delay or even lead to your bankruptcy case getting dismissed. That’s why you should have a lawyer on your side, one who knows this process inside and out.
Talk to a Bankruptcy Attorney
When you are ready to learn more about bankruptcy and how our attorneys can help you, reach out to our legal team. Contact the Law Office of Boyd & Squitieri to schedule a consultation and see if this process is the right fit for you.
