Bankruptcy can be a life-changing experience. Whether it’s a positive or negative event depends on how you handle it. If filing bankruptcy is in your near future, there are several things you should NOT do before filing. At the Law Office of Terrence Fantauzzi, I can help you navigate the complex requirements and determine whether Chapter 13 or Chapter 7 fits your situation best.
Planning and properly executing your bankruptcy filing are crucial to achieving the best possible results. However, there are certain mistakes that many people make when approaching bankruptcy that can sabotage the outcome before they even get started.
Increasing Credit Debt Before You File
If you’re considering bankruptcy, it may be tempting to max out your credit by making one or more significant purchases. This is one of the biggest mistakes you can make. The “presumption of abuse” period is the 90 days leading up to the bankruptcy filing. The court may consider any major purchases and even debt consolidation during this period, fraud. Refraining from these transactions may allow you to file for Chapter 7 and receive your discharge in a smooth process, if you pass the means test.
Failing to Declare All Assets
To achieve your goals of having your debts discharged, you must be honest about your property. This includes but is not limited to:
- Bank accounts
- Real estate
Although the court may understand if you miss listing an asset, it may not. The trustee assigned to your case will research your situation, and the court does not look kindly on those who hide assets. If you transferred property to family members or didn’t list a bank account, you might become ineligible for a bankruptcy discharge.
Filing for the Wrong Type of Bankruptcy
If filing bankruptcy is the best option for getting you financially back on track, the next step is determining which chapter of bankruptcy can provide the most beneficial outcome. Chapter 7 and Chapter 13, though both consumer bankruptcy options, have different requirements. Filing the wrong type can result in the dismissal of your case. If you file Chapter 13, you must agree to a three to five-year plan for repaying debt. If the plan is unrealistic, you may miss scheduled payments. In situations when this occurs, your court-appointed trustee may file a motion to dismiss your case, and you will not get a discharge.
Contact an Attorney Today
Bankruptcy is a very personal event, and everyone’s situation is different. You could go to one of the big firms that roll your case through the system with several thousand others each month, but you may not achieve the hoped-for results. I provide personal attention to the details of your case to ensure your California bankruptcy goes as smoothly as possible. Contact me today to schedule a free consultation. We’ll discuss your concerns and determine if bankruptcy is truly the best option for you. If not, there may be alternatives that can help provide debt relief and stop creditors from harassing you.