More often than not, when people go to file for bankruptcy too many mistakes are made and any chance they had of discharging debts and hanging onto exempted property are lost. Seeking experienced counsel such as a bankruptcy attorney about these matters can end up saving you a lot of money in the end. However, before you seek out a bankruptcy lawyer, consider looking into the following five mistakes to make sure your filing runs smoothly.
1. The Transferring of Credit Card Balances: Do not transfer a large amount of credit card debt (over $1500) from one credit card to another, especially if filing for inability to pay debts within 60 days. It may alert a red flag and make the transaction appear fraudulent.
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2. Paying off Loans to Family Members: It is fraudulent to pick and choose which of your creditors are paid off first. The inability to pay your debts code says that all creditors should be treated equally. If any repayments are made just prior to filing for no money to make payments, then the inability to pay debts trustee has the right to pursue a part of the funds that were paid out. This is also in the case of paying back relatives. Should you make a loan repayment of say two or three thousand dollars, this money can also be come after as all money must be paid back equally to debtors. All debts are required to be listed and on the premise that no objections are made by family members, the debt will be wiped and paying the loans back will be at your sole discretion.
3. The Transferring of Assets and Real Estate: Each state has different exemptions for the inability to pay debts concerning property that are in place to protect all of your assets or a part of them, making it unnecessary to transfer any property to others before an inability to pay your debts filing. Therefore, it is not a good idea to transfer assets to family members simply due to the trustee could 'avoid the transfer', meaning you are not only right back where you started before the transfer, you could lose all chances of having your assets protected under the inability to pay debts law.
4. Do Not Ignore Lawsuits: If you have not yet completed filing for the inability to pay your debts but receive a lawsuit, it can be beneficial to attend the court hearing, as this will provide the opportunity to file for relief. If you have already filed and still received a summons for a court appearance, speak to your counsel as they can more often than not have the case dismissed.
5. Make Sure You Include All Debts On Your File: Although you may want to retain some of your debt, it is a requirement that all debts be listed. Sometimes a person's house or car may be something they want to retain, in this case, a reaffirmation agreement could possibly be signed that would exclude those specific debts from your file.
Making sure you seek correct counsel and following some simple rules before the thought of filing for any relief of repaying debts, can make a big difference in the filing process and its outcome.
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