When filing bankruptcy, you want to avoid any behavior that will make it more difficult for the court to fully discharge your debts. Some mistakes are very easy to avoid. Others are not as simple to avoid because you do not know about them.
It seems like a common sense approach to bankruptcy, but if you are asking that your former debts be forgiven, do not rack up new debts. Going out and buying a new flat screen television is not going to help your bankruptcy case. The goal is to get rid of all the debts you have, not make more problems for yourself.
Avoid applying for and getting new lines of credit. This includes, not just credit cards, but payday loans and store credit cards as well. Opening these new lines of credit will not show the court that you are serious about wiping out your current debt with the intent to get your life back on track.
Be Honest About All Debts
When you file, it is tempting to keep some of your financial life private. Some people feel intense shame about going through bankruptcy and neglect to share how much they truly owe. This is the worst possible time to be dishonest about anything. If you don't share all your creditors with your bankruptcy attorney, these debts cannot be discharged. That means even after having your bankruptcy successfully discharged, you will likely still owe some people money.
Disclose All Income And Possessions
Do not try to keep any income you earn private, no matter how little. If you have a side business that brings in less than 100 dollars per month, share that information with the bankruptcy court. You do not want to give the impression that you are being dishonest with the court. Another mistake is attempting to hide assets. Bankruptcy laws have exemptions to protect your possessions. If you neglect to disclose some property, you may ruin your chances of having your bankruptcy finalized.
Keep All Your Property In Your Name
If you plan to file bankruptcy, the last thing you want to do is give away or sell expensive items. Some of those possessions may be exempt from bankruptcy. Others may be seized and help to pay off some of your debt. You may mean well by giving your second car to your daughter, but that will not help your case in any way.
When filing for a bankruptcy, be upfront and honest about all of your income, assets and bills. Failing to disclose all information could cause your case to be denied. A successful bankruptcy can relieve stress and change your life, but only if you avoid these common mistakes.