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Common Mistakes to Avoid When Heading Into Bankruptcy

On Behalf of | Jul 6, 2015 | Bankruptcy Basics

If you are tired of struggling financially and you are ready to do something about your debt, it may be time to consider filing for bankruptcy. By filing a Chapter 7 or Chapter 13 case, you can eliminate your debt and obtain a fresh financial start.

When you are preparing for bankruptcy, there are several common mistakes people make and that you will want to avoid, including:

· Failing to make proper financial disclosures. Whether you are concerned about qualifying for a certain type of bankruptcy filing or you don’t think your side job is important enough to disclose, it is important to understand that the court requires you to make FULL financial disclosures. Leaving out assets or income could result in your case being dismissed.

· Failing to list all vehicles. All vehicles that you own must be included in your bankruptcy filing. This includes cars that are jointly owned by you and your child, even if you do not ever drive the vehicle. You should not transfer the vehicle to your child prior to your filing because it can get you into big trouble.

· Failing to list all of your creditors. Many clients ask if they can leave one credit card out of their bankruptcy so they can continue to use it. The answer is “no,” you must list all of your creditors. Additionally, the credit card company will likely find out about your filing even if you do not list them, which can create unintended issues. Most debtors have no problem obtaining new credit after bankruptcy, so don’t run the risk by leaving out a creditor.

· Transferring assets or making payments prior to filing. Don’t think you can hide certain assets by transferring them to another individual to “hold” for you. This is illegal and can cause serious complications for you. Additionally, you should not pay back friends and family that you borrowed money from. Your friends and family are considered creditors and you are not allowed to prefer them over your other creditors.

· Failing to list any pending lawsuits. No matter what type of lawsuit is pending against you or that you have filed against another party, it must be listed in your bankruptcy case.

· Using credit cards prior to filing. Don’t think you can max out your credit cards and then discharge all of the debt. If the court discovers that you incurred charges with the intent of discharging them, it can hold you liable to pay for all of these debts despite your bankruptcy filing.

· Procrastination. The longer you wait to file your bankruptcy case, the longer your finances will deteriorate. As soon as you file your Chapter 7 or Chapter 13 case, all garnishments, asset seizures, foreclosures and collection lawsuits against you must stop.

We are bankruptcy lawyers who know how to make a difference in your financial situation. We have experience you can rely on and we care about your results. Contact our New Jersey law firm online by filling out the form or by calling 973-323-2953 to schedule a free initial consultation with an attorney at Levitt & Slafkes, P.C..