There are 4 major bankruptcy mistakes people make before filing for bankruptcy that people think will help them but won’t.
- Running up credit card debt 90 days before filing. You are tempted to save money and run up credit card debt for things you usually pay cash with. Credit card debt is usually dischargeable. But by making this bankruptcy mistake the trustee will question credit card debt within 90 days before you file your petition . The debt may also not be discharged.
- Transferring assets. You may want to hide assets by transferring them to someone else. You think the Trustee won’t take them to pay your creditors, but Bankruptcy has a look back period. The trustee will be able to void the transfer and sell it for your creditor’s benefit. So do not transfer assets within 1 year of filing for bankruptcy (or 4 years to an insider such as a family member or business partner) If you fail to disclose the transfer you, the trustee may look into allegations of bankruptcy fraud.
- Waiting too long. You can file an emergency petition to stop a sheriff sale or some other need for immediate relief. But the longer you wait the less options you have to deal with your debt. In order to delay a sheriff sale of your property, start a loan modification process at least 37 days before the sale. Waiting past that time will often mean that bankruptcy is your only option.
At Tomes Law Firm, PC we suggest that you speak with us earlier than later to discuss your financial distress. This will allow us to discuss more options for you than simply bankruptcy. While bankruptcy is a useful tool for allowing to get out from under your debt, it is only one method. We at Tomes Law Firm PC have experience in several ways of handling your debt. Our initial consultation to discuss your debt strategy is always free.