When you are preparing to file for bankruptcy, there are often many mistakes that are made that can delay your petition from being granted—or, worse, prevent your bankruptcy request from being approved. Below, we discuss some of the most common types of bankruptcy mistakes people make, and what you can do to avoid going down the same path.
To start, debtors will sometimes make the mistake of leaving out creditors and debts they owe when declaring bankruptcy. Your financial disclosure statement should include every single creditor and debt you have. Some of these debts may not be dischargeable, but having all of your creditors and debts in one place can give you and the courts a greater understanding of how extensive your debts truly are.
What’s more, failure to list a creditor when you declare bankruptcy means that the creditor left off your disclosure statement will still be able to report your debt to credit bureaus and attempt to collect the debts in question. There is also the possibility that your petition can be denied if the judge thinks you intentionally left a creditor out of your financial statement.
Another possibly damaging,mistake that people make is heading out on the town to max out their credit cards and spend every cent they have available, as they believe they’ll be filing for bankruptcy anyway, and will not be expected to repay that debt.
This couldn’t be further from the truth, as certain types of bankruptcy require you to repay your creditors over time rather than liquidate your assets. Furthermore, this is not only frowned upon by the judge, but they can render these debts non-dischargeable, and you’ll be ordered to repay these creditors, despite your bankruptcy declaration.
If you are tempted to hide your high-cost belongings and property, you should strongly reconsider doing so. As part of the bankruptcy petition process, you will need to report your income, assets, property and debts to the court in a financial disclosure statement.
When you attempt to hide your valuable possessions so they are not considered when discussing your bankruptcy petition, you are committing bankruptcy fraud. You can expect to have your bankruptcy request denied, be fined, and possibly even be put in prison if you are found guilty of such a crime.
The fewer mistakes you make when filing for bankruptcy, the smoother the process will go. Once your petition has been granted, and your debts discharged, you’ll be on your way to a clear financial slate.
You can get help with all of your bankruptcy needs by working with an Indiana bankruptcy lawyer at Rowdy G. Williams Law Firm. Just visit our website or give our office a call at 1-812-232-7400 and we will schedule your free case review at your earliest convenience.
