The Top 10 Bankruptcy Mistakes
Jacksonville Bankruptcy Lawyer
There are 10 serious mistakes that you need to avoid if you are considering filing for bankruptcy. These mistakes can make the situation much, much worse. We have helped hundreds of people through the bankruptcy process, and we hope to warn you against these errors. We offer our services to discuss your personal financial situation and find a solution that will work for you and your family. A Jacksonville bankruptcy lawyer from our firm is here to help you through the process and make it successful.
The 10 Mistakes to Avoid:
It is natural to avoid unpleasant things including overdue bills, creditors and filing for bankruptcy. No one wants to file; we know that our clients feel terrible about their situations. Unfortunately, the longer you wait the more difficult it becomes. You can lose your home, suffer from repossessions of your car or other items, and deplete your retirement accounts that would have been safe for your future had you filed for bankruptcy. Don't wait too long. This can be a serious mistake.
- Getting a second mortgage to handle your financial problems
Some people who are committed to handling their bills choose the option of getting a second mortgage to pay off unsecured debt (such as credit cards). It is not wise to risk your home by taking a second mortgage. In filing for bankruptcy, you can have credit card debt discharged - you will no longer owe it.
- Depleting your IRA or 401K accounts to pay off creditors
Your retirement accounts such as IRAs and 401K plans are exempt assets. You do not lose these assets when you file for bankruptcy. Not only will these accounts provide for you in your older years, they can help you reestablish your credit after filing for bankruptcy. Never deplete these accounts to pay off unsecured debts.
- Filing bankruptcy when you expect to get a substantial tax refund
If you are expecting a tax refund you could lose it if you file at the wrong time. You need to discuss this with our Jacksonville bankruptcy lawyer before you move ahead.
- Reaffirming Debts in Bankruptcy
Keeping loans in the bankruptcy process (reaffirming) could make it almost impossible to actually recover and get the fresh start you need. For example, if you are significantly upside down on your car and your payment is high and your interest rates is high, refinancing can be a bad idea.
- Failing to list all of your creditors
If you do not list a creditor because you forgot you owed them money on a debt, your bankruptcy petition may not be discharged. You must list ALL creditors, even when you are planning to repay them rather than ask for that particular debt to be discharged in the bankruptcy process. You also are required to list any personal loans from family or other associates if you don't want to run into real trouble legally.
- Using your credit cards shortly before filing
Significant cash advances, large purchases or charging luxury goods within 3 months of filing bankruptcy can be an issue.
- Paying back personal loans to family or friends before filing
Most people feel strongly obligated to pay back family that have loaned them money during their tough financial times. However, paying back these loans within one year of filing bankruptcy must be avoided, or your family member could be sued to get back the money, creating more serious problems for them.
- Transferring assets, such as property to cash to others
If you transfer any of your assets to others (family members or other people) prior to filing for bankruptcy, these could be recovered by the bankruptcy Trustee as a fraudulent transfer. Giving away any cash, assets, or other assets to your children, your parents, brothers, sisters, friends or others will not protect them from the Trustee. This could lead to legal issues and your family could be sued, and you could jeopardize the entire process and be denied the right to a discharge.
- Ignoring legal letters from the Court or your attorney
If you get a notice or letter from the Court or from your attorney, you need to read it and ensure that you answer it or arrive for a hearing. If you fail to respond, it could have serious consequences. The attorney often needs specific information or documents requested by the Court and if you don't provide them, the whole process could be derailed, and you will lose your opportunity to discharge your debt.
Contact a Jacksonville bankruptcy lawyer and get help in avoiding mistakes in filing for bankruptcy.