In case you are having trouble in managing your finances and the debts keep on surmounting, bankruptcy is legal recourse available to take care of the situation. However, there are certain things to be kept in mind if you are considering filing for bankruptcy. It is important to consult a bankruptcy lawyer such as those of Los Angeles based law firm Recovery Law Group to help you prepare for your case as well as the outcome. It is important that you are aware of the changes your life will take after the bankruptcy case gets over. Bankruptcy lawyers also help to provide information regarding the process and ensure that your rights are protected during the entire bankruptcy proceedings.
A major task of bankruptcy lawyers is to ensure that their clients do not commit some mistakes prior to bankruptcy filing which can have a disastrous effect on their case. Here are some things which people thinking of filing for bankruptcy should avoid at any costs:
Not hiring a lawyer – People can file for bankruptcy without a lawyer too. Many times they think that hiring a lawyer will be an additional expense. However, laymen are unaware of the intricacies of the bankruptcy proceedings and can cause more harm to their future without a lawyer than with them. Going solo can be the biggest mistake you could make in a bankruptcy case.
Neglecting to file for tax returns – Your tax returns are essential and form an integral part of your bankruptcy petition. All income tax claims are satisfied thanks to the timely tax returns filed. In case tax returns are not filed and up-to-date, this could have a detrimental effect on your case and it may even come to a standstill.
Providing incorrect information – You are required to submit your financial data to bankruptcy trustee or lawyer when you file for bankruptcy. This data is reviewed by the court and in case the information is incomplete, inaccurate or false, there could be criminal proceedings against you, your case might get dismissed and your debts not discharged, thus ruining your chance of getting over financial instability through bankruptcy.
Moving assets or changing titles – There is a certain time period before filing for bankruptcy which specifically comes under scrutiny in case you have moved your assets elsewhere or changed the title of ownership of any property. This is taken as an attempt to hide assets which may cause your case to be dismissed. In case you have done anything of this sort, you should wait for some time frame before filing for bankruptcy.
Running up debts – If you get on a spending spree within 90 days of filing for bankruptcy, the debts may not be discharged. This kind of activity is considered fraudulent and if proved so by creditors, you will be found liable to clear all those debts which had been made in the hope of getting discharged.
Prioritizing creditors – Some payment made by you can be undone in some cases of a bankruptcy filing if the court finds the circumstances dubious.
Hiding assets – Many times people either hide assets or fail to disclose any asset that they can expect (will, settlement, trust or lawsuit, etc.) It is important to trust bankruptcy lawyers to protect such assets legally.
In case you are considering to file for bankruptcy to get over your financial problems, ensure that you consult lawyers who specialize in handling bankruptcy cases. They can advise you on the options available to you for debt relief including which chapter you should file under for maximum benefits.