Avoiding the Top 5 Mistakes in Chapter 7 Bankruptcy
Filing for Chapter 7 bankruptcy can be life-changing: it offers a fresh start and a new financial freedom. But in the years I’ve practiced as a bankruptcy lawyer, I’ve seen how simple, avoidable Chapter 7 bankruptcy mistakes can derail a person’s goals.
Fortunately, it doesn’t have to be that way. There’s no reason to complicate your case over an unforced error. And our team is here to guide you through the process and help you steer clear of these mistakes.
Here are some important tips to keep in mind.
1. Not Filing at the Right Time
Timing is everything in Chapter 7 bankruptcy. Filing too early or too late can impact your case significantly.
For instance, if you file around the time you receive a sum of money—like from an inheritance or bonus—it can change your case by increasing your assets.
On the other hand, if you wait too long, you might face wage garnishments or lawsuits from creditors, which only adds to your stress and costs you money over time.
It’s important to discuss the details around your filing with our lawyers, so we can help you choose the right timing for your situation.
2. Failing to List All Your Creditors
When you file for bankruptcy, you need to list all of your creditors. Missing even one can cause problems, as that creditor could still come after you for payment because they weren’t included in the bankruptcy proceedings.
To avoid this mistake, gather all your financial documents and bills, and let’s review them together. We can help ensure you list everything correctly.
3. Incorrectly Valuing Assets
The way you value your assets can be a common and risky mistake. If you undervalue your possessions, you might be accused of trying to hide assets from the bankruptcy process, which can lead to serious legal consequences. However, overvaluing them might mean losing more than you need to.
We can help you accurately list your assets so you avoid any penalties. And if you’re worried about protecting certain assets, like your house or car, we can help you decide between all your options. We’re here for you and your specific goals.
4. Continuing to Build Up More Debt
Once you decide to file for bankruptcy, stop going any further into debt.
Any debts you incur just before filing can be flagged as fraudulent—meaning it might look like you intended to get rid of these debts without ever paying them back. That could mean serious legal problems or fines.
In addition, creditors can challenge the discharge of these recent debts, which might leave you responsible for paying them.
So if you have any questions about new debts, ask your bankruptcy lawyer first. We can help you avoid any dangerous debt situations.
5. Trying to Handle It Alone
Bankruptcy law is complex, and the process can be overwhelming. While it might be tempting to save money by not hiring a lawyer, this will likely end up costing you more in the long run. The resulting Chapter 7 bankruptcy mistakes could include:
- Errors in filing the paperwork
- Missed deadlines
- Penalties over incorrect assets and debts, and even…
- Having your bankruptcy petition denied or thrown out.
A skilled bankruptcy lawyer by your side will make sure everything is done correctly and your interests are protected throughout the process.
Legal Help to Avoid Common Chapter 7 Bankruptcy Mistakes
Remember, you can avoid these Chapter 7 bankruptcy mistakes with the right guidance and support.
If you’re feeling overwhelmed or unsure about filing for Chapter 7 bankruptcy, let’s discuss your situation. We offer a free consultation where we’ll review your options and make sure you’re confident about your path to financial recovery.
The decision to file for bankruptcy may be hard, but the process can be easy. With the right help, you can navigate it successfully and come out on the other side ready for a fresh start.
To talk with one of our team members today, at no charge, just reach out to us online or call 901-327-2100.