Filing for bankruptcy can provide a significant amount of financial relief. The decision to file for bankruptcy is difficult; however, it can provide a fresh start, and reduce stress.
However, if you want to see all the benefits of bankruptcy, you must make sure you handle the process properly. The best way to do this is by avoiding some of the most common mistakes.
1. Not choosing the right type of bankruptcy to file
You have several types of bankruptcy to choose from when filing. For example, Chapter 7 is often called “liquidation bankruptcy,” and Chapter 13 is referred to as a “reorganization bankruptcy.”
You need to see what type you will qualify for so that you know what options you have. Remember, everyone’s situation is unique, and you need to choose the option that best meets your needs. Only an experienced bankruptcy attorney will be able to help decide which is best for your situation.
2. Not filing promptly
If you know you are dealing with financial issues, a serious mistake is taking too long to file. Usually, you can save a significant amount of money if you address the issue when you realize you are struggling with debt. If you wait too long, you could end up facing liens on your property or judgments that will take part of your pay.
3. Attempting to hide assets
You may be tempted to try to hide some assets before declaring bankruptcy. However, transferring something out of your name to avoid including it in the filing may be considered fraud. There are serious consequences for doing this, so it is best to avoid it altogether.
Getting it right when filing for bankruptcy
If you have decided to file for bankruptcy, it is important to keep the information here in mind. Knowing your legal options and rights is also important. This will help you avoid mistakes that may cost you when you file.