Mistakes People Make When Filing For Bankruptcy
Filing for bankruptcy could be the best financial decision you ever made if you are in debt -it offers you the chance to clear your debts and move forward. But it’s not something to be entered into lightly. In Missouri, as in most other states, you are allowed to file for bankruptcy without the help of an attorney. This is not the most conventional way to go. A bankruptcy attorney in Creve Coeur, Mo, can help you navigate the bankruptcy minefield and offer you the best possible chance for a fresh start. Nevertheless, if you choose not to hire an attorney, it helps to know the common traps and caveats that you might fall victim to. Here are four mistakes to avoid if you attempt to file for bankruptcy without an attorney.
Waiting too long before filing for bankruptcy
Yes, filing for bankruptcy isn’t the easiest decision to make, and it may take you a while to think about it. But don’t take too long. In short, timing is everything when considering filing for bankruptcy. For one, if you delay filing, you may realize that Chapter 7 is no longer a valid option for you, let’s say, because your income is too high. Are you about to get married? You may have to postpone your big event. That’s because once you are married, your spouse’s income will also be scrutinized, and your filing could be rejected. A bankruptcy attorney in Creve Coeur, Mo, will also caution you against filing for bankruptcy just before receiving a large sum of money. That’s because you may have to hand it all over to your bankruptcy trustee.
Transferring assets for less right before filing
It’s tempting to attempt to hide your assets by transferring them to someone else right before filing for bankruptcy. Most often than not, a debtor will transfer their property for less than its worth. The problem with opting for this route is that it’s considered fraudulent. During your meeting with creditors, you will have to disclose any property transfers you might have made within the last two years. If you fail to disclose even a single transfer, you may find yourself facing a charge of perjury. The trustee may also charge you for fraud if you transferred your assets for less simply to shield them from creditors.
Filing for the wrong type of bankruptcy
There are several types of bankruptcies, the most common ones being Chapter 7 and Chapter 13. It’s worth noting that not all bankruptcies are created equal, which means one might be the better option for you, depending on your circumstances. A Chapter 7 bankruptcy, also known as liquidation, can be the logical choice for you if you don’t have a lot of assets. It typically involves the sale of your assets to pay off creditors. To qualify, the court must decide that you don’t have the means to pay back your debt. A Chapter 13 bankruptcy, on the other hand, involves reorganizing your debts. You will be able to keep your assets but must agree to a monthly payment plan over the course of three to five years. When in doubt, it’s always best to consult a bankruptcy attorney in Creve Coeur, Mo. Otherwise, you might wind up in a far worse financial position than before.
Undervaluing your assets
Undervaluing your assets is yet another reason that may have you facing charges of fraud. Your creditor’s trustees will thoroughly investigate whether your debts and assets are correctly categorized. Getting anything wrong will put your bankruptcy case at risk. Trust our bankruptcy attorney in Creve Coeur, Mo – full disclosure is necessary when filing for bankruptcy.