Mistakes to avoid when filing for bankruptcy

Filing for bankruptcy can give you a fresh financial start by wiping out most of the debt currently bogging you down. However, you need to get everything right to make the most of the bankruptcy process. Some mistakes could derail your bankruptcy plans, throwing you deeper into financial problems.

If you are thinking of filing for bankruptcy, below are some of the mistakes you need to avoid.

Running up your credit card debt

Incurring more debt because you intend to file for bankruptcy is a common mistake. If you take on debt without the intention of paying it back borders on fraud, and in some cases, you may have to pay back any such debts incurred in bad faith.

It is advisable not to use your credit card or take on any new debt after you decide to file for bankruptcy.

Transferring property to another person

In a bid to protect your assets from liquidation, you may be tempted to give them away to family or friends as gifts. However, doing so could land you and the recipients in legal trouble if it is established that you were doing so to skirt bankruptcy laws.

Lying about your assets

It is advisable to be forthcoming with all your financial details when filing for bankruptcy. For instance, if you lie about your assets to qualify for bankruptcy, your case could be dismissed when your dishonesty is discovered. Similarly, leaving out debts could leave you financially exposed when creditors come calling.

Not having the necessary information

You need to be aware of what to expect in the bankruptcy process so that you can reap the maximum benefits. Learning more about how it works, including the debts that will remain undischarged and how to regain your credit rating, will help you plan for the future ahead as you work toward regaining control of your finances.

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