Learning About Bankruptcy

Posted on: 12 July 2016

If you're in debt, and you see no way out, you may need to file for bankruptcy. One of the benefits of filing for bankruptcy is that it provides you with the fresh start that you'll need to get back on your feet financially. Before filing for bankruptcy, however, you need to know that there some mistakes that can damage your case. Here are four mistakes you should avoid when filing for bankruptcy.

Filing Without an Attorney

If you have to file for bankruptcy, you need to have legal representation. There are specific filing requirements, as well as deadlines that must be met in a timely manner. Failing to understand those requirements could cause your bankruptcy case to be delayed. Visit a site like http://www.wflaw.net to learn more.

Giving Property Away

If you're about to file for bankruptcy, don't give your property away. You might think that it's a good idea to dispose of your assets, so that they don't become part of the bankruptcy. Unfortunately, transferring money to avoid liquidation may cause your bankruptcy to be denied. It may also result in fraud charges being brought against you. If you're about to file for bankruptcy, talk to your attorney about the assets that you have. You might be allowed to keep them.

Paying Specific Creditors

You may think that it will help your bankruptcy case if you pay off some of your debts before filing. However, under bankruptcy law, that's not allowed. In fact, if your bankruptcy trustee – the court-appointed person in charge of your case – finds out that you made preferential payments to certain creditors, while avoiding payment to others, the court may sue to have those payments returned.

Building Up Credit Card Debt

If you're going to be filing for bankruptcy, you need to stop using your credit cards as soon as possible. This is particularly true if you're using them for non-essentials, such as leisure time activities. The courts will look at your purchases leading up to the bankruptcy filing. If they see that you were spending money prior to the bankruptcy, they may question why you were accruing additional debt that you knew you wouldn't be able to pay for.

If you need to file for bankruptcy, make sure you and your assets are protected. The information provided here will help you avoid making costly mistakes when filing for bankruptcy protection. If you have questions or concerns regarding your case, be sure to speak to your attorney.