When you are up to your ears in debt and can't see the light at the end of the tunnel, bankruptcy is an option to consider. Of course, making the decision to file for bankruptcy is a difficult one. After all, it is a decision that will affect not only your current finances and future credit, but your reputation and self-worth. However, it opens up the path to a fresh start financially, which can be very beneficial in a number of ways. Once the decision has been made, it can be helpful to know some of the most common mistakes that people make when they file for bankruptcy so that you don't make them yourself. Here are three of them:
1. Providing Dishonest or Inaccurate Information
Whether it is on the paperwork that you feel out or at your 341 meeting, you must be 100 percent honest and accurate about any information that you disclose. This includes any information you give related to your income, debts, assets, expenses, financial history, etc. If you fail to do so, you are putting yourself at risk of being criminally prosecuted.
2. Failing to Complete Your Paperwork in Full
While you shouldn't lie on your paperwork, it is just as important that you don't leave anything out on your paperwork. Blanks are not ideal unless they truly are not applicable, in which case you should put N/A. If you leave something out on your paperwork, it can hurt you later in your case in terms of more paperwork and fees. It may even result in the debt being excluded from your filing and unable to be discharged. If you fail to disclose an asset, it could be taken from you later on when it is discovered.
3. Racking Up Debt Right Before Filing
Some people think that they get away with maxing out their credit cards and racking up as much debt as they can in the last few months leading up to their bankruptcy filing. However, this is not necessarily true. In fact, this could be considered fraud. If you are caught, the debt may not be discharged. It may be also be possible that your entire bankruptcy case will be thrown out by the course. Nolo reports that fraudulent activity is often suspected when more than $925 in cash advances are withdrawn within 70 days of your filing or purchases of more than $650 are made within three months of the bankruptcy filing.
To ensure that all your paperwork is correctly filed and that your rights are fully protected, consult with a professional bankruptcy attorney in your area. Contact a law firm, such as Wiesner & Frackowiak, LC, for more information.