Bankruptcy can offer a welcome relief when you are drowning in debt. As such, the decision to declare bankruptcy is one that you should never take lightly. It is imperative that you get every aspect of bankruptcy declaration right from the onset.
If you decide to file for bankruptcy, it is important that you steer clear of the following mistakes.
1. Filing the wrong bankruptcy
Once you have decided to file for bankruptcy, you need to know the exact type of bankruptcy to go for. This is basically dependent on the nature of your debts. And this usually comes down to either Chapter 7 or Chapter 13 bankruptcies. It is important that you understand how these bankruptcies work, and the debts you can discharge with them, before filing. You risk having your case dismissed if you file the wrong type of bankruptcy.
2. Being dishonest
When it comes to bankruptcy, honesty is an important rule of thumb. You have to be honest to achieve your goal. Part of the process of preparing your documents involves listing all the assets and debts in your name. Failing to make a complete disclosure of your assets and debts (intentionally or by mistake) can lead to the dismissal of your claim. But that’s not all. This could amount to bankruptcy fraud, and it can land you in serious trouble.
3. Failing to complete credit counseling classes
During the bankruptcy process, you will be required to complete credit counseling classes through an approved credit counseling agency. You will also be required to take a personal finance management course before you can receive a discharge. It is important that you take these classes seriously. If you do not, your bankruptcy claim might be denied.
Bankruptcy is an important tool when debtors are on your neck. Find out how you can safeguard your rights while declaring bankruptcy.