Pitfalls to Avoid When Filing for Bankruptcy

Admin on January 13, 2023 Posted in Bankruptcy Law, Blog

Filing for bankruptcy is a difficult and overwhelming decision to make. As you work through the process of filing, it is important to know what mistakes you should avoid. If you want to seek debt relief, contact a Bay Area bankruptcy attorney at the Law Offices of Melanie Tavare for legal advice. Melanie Tavare will help you evaluate your situation and explain what steps to take and which pitfalls to avoid to ensure the process goes smoothly.

Mistakes to Avoid When Filing for Bankruptcy

If you are considering filing for bankruptcy, there are certain mistakes you should avoid in order to secure the best possible outcome for your bankruptcy case. By avoiding the following common pitfalls when filing for bankruptcy, individuals considering this route will find themselves better prepared both financially and emotionally when going through this difficult journey.

Not Listing All Creditors

When filing for bankruptcy, you must list all your creditors even if you think they will not be affected by the bankruptcy proceedings. If you leave out any creditors, there could be negative consequences, such as having to pay back the debt that was discharged in the bankruptcy or having a trustee challenge the discharge of a debt. To ensure that all debts are listed, create an up-to-date list of all your creditors and provide the information to your attorney and/or trustee.

Trying to Hide Assets

Hiding assets from a bankruptcy court is considered fraud and has serious legal ramifications. If you fail to disclose all assets during the filing process, it can lead to criminal charges and even jail time, as well as have a negative impact on any future credit applications you may need to make. It’s imperative that all assets are disclosed so that they can be used toward paying off any debts you owe.

Going on a Shopping Spree Before Filing

It can be tempting to buy something special before or after filing for bankruptcy, but this should be avoided at all costs. Making large purchases before filing or overusing credit cards right before filing could lead to serious problems with your case and possibly lead to denial of the petition or other penalties from the court. This could also delay the process of receiving relief from debt payments from months into years.

Racking Up New Debt

Once you have decided to file for bankruptcy, stop using credit cards or otherwise racking up new debt immediately. The Bankruptcy Court will look closely at any new debt incurred within 90 days of filing—you could face allegations of fraud if there are too many new charges during this period (Section 547 of the Bankruptcy Code). It is also important not to take on any major financial obligations, such as buying property or making investments during this time, as these would have an impact on your overall financial situation after filing for bankruptcy.

Waiting Too Long to File for Bankruptcy

Bankruptcy laws vary by state, so it is important that you speak with an attorney about the specifics in your area. Additionally, waiting too long before filing can cause more harm than good—as soon as you realize that you are in over your head financially, consult with an attorney right away so they can help guide you through the process and avoid potential pitfalls along the way.

Bankruptcy Attorney Melanie Tavare Can Help You Avoid Mistakes

Filing for bankruptcy is an intimidating process, but being aware of potential pitfalls can help alleviate some anxiety around it. Knowing what mistakes not to make when going through this process will help ensure that everything runs smoothly and quickly.

Seek legal guidance from an experienced bankruptcy attorney to ensure that you avoid mistakes when filing for bankruptcy. Contact the Law Offices of Melanie Tavare to discuss your unique situation and determine your best course of action if you want to get out of debt. Call 510-255-4646 today for a free consultation.