One of the largest mistakes that debtors make is not considering filing for bankruptcy. Even the most honest and good-natured efforts can be ineffective when debtors are in a situation in which their debt load is seriously out of control.
Bankruptcy can be the most viable and optimal solution for certain individuals; however, the decision is one that should not be taken lightly. There are common mistakes that people can make that might actually serve to hinder or deter them from filing. If you are considering bankruptcy, there are certain mistakes that you want to avoid in order to increase your chances of successfully filing..
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One of the biggest mistakes that consumers make is to run up all of their credit cards right before they declare themselves bankrupt. Some individuals think that just because they are filing, they might as well max out their credit cards; however this type of thinking will get you into trouble! Certain debts that are incurred within 90 days before declaring yourself bankrupt are not dischargeable, which means that you may be obligated to pay those fees regardless.
It is also important that you do not transfer property out of your name before filing. Some people transfer the title of their home to friends or family members before a declaration of bankruptcy in order to save their property. However, the a trustee may be able to reverse such a transfer of property if it was made in an attempt to hide your assets or properties from creditors. In many cases, it's completely unnecessary to do so because lawful exemptions may protect you from losing your home.
Don't hide assets from your attorney. If you hide information, your legal counsel will be unable to accurately advise you on your situation. If it is later revealed that you have hidden important assets or information it could create serious risks that are not worth it. You could lose your assets, have your case dismissed or worse, face criminal charges.
Don't pay off credit card debts with your 401(k). Creditors can be very unpleasant and relentless. For individuals who go bankrupt, settling the debt of unpaid credit cards is low on the priority list when it comes to legal advice regarding your financial situation. Credit card debt is unsecured, which means they cannot seize your property, or take your home. Unless they obtain a judgment against you where your wages are garnished, they can't touch you. It is not a good idea to deplete your 401(k) in order to pay off unsecured debt. These retirement accounts are almost always untouchable in a bankruptcy; therefore, no one will have access to this money, not even the trustee.
If you are considering filing for bankruptcy, the best thing you can do is get informed. A highly experienced attorney can explain financial laws to you and help you assess your situation. There may be more than one workable solution for your situation, and the sooner you learn about your options the sooner you can be put back in the driver's seat. Don't hesitate to contact a seasoned San Antonio bankruptcy lawyer today!
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