Memphis bankruptcy attorneyThe Worst and Most Common Bankruptcy Mistakes Our Memphis Bankruptcy Lawyers See

The biggest bankruptcy mistakes can have massive consequences. A judge may throw out your case, or you could lose more than you meant to. You might even be committing a crime without realizing it.

At our Memphis bankruptcy firm, we’ve seen it all. Here are the five biggest mistakes you can make when filing for bankruptcy:

One: Failing to Disclose All Assets

One of the most common mistakes people make when filing for bankruptcy is failing to disclose all of your assets. That includes bank accounts, investments, or property.

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It’s important to make sure the courts know about all of your assets from the beginning. If you don’t, it can look like you’re trying to hide something, which would be fraud. 

Some people may try to transfer their assets to a friend or family member before filing for bankruptcy, with the intention of getting them back after the case is closed. This is known as “fraudulent conveyance” and can lead to serious legal consequences, including the dismissal of the bankruptcy case or even criminal charges.

Bankruptcy is meant to help you, so it’s critical to be as honest as possible from the start.

Two: Filing for the Wrong Type of Bankruptcy

Another common mistake is filing for the wrong type of bankruptcy.

For personal bankruptcy, you usually qualify for either a Chapter 7 or Chapter 13. If you file for the wrong one, your case could be dismissed or you could lose really important assets.

In my experience as a bankruptcy lawyer, this doesn’t happen with a really great attorney unless you decide to hold on to assets you don’t need. For example, maybe instead of keeping the car you have now, it’s time to find a new car. If you decide to hold on to it instead, it could push you into a Chapter 13 when a Chapter 7 might be better for you.

tax debt bankruptcyThree: Missing or Leaving Out Paperwork

Paperwork is a big part of bankruptcy. So one of the biggest bankruptcy mistakes — especially if you don’t have a really good attorney — is failing to complete required paperwork. This includes financial disclosures, tax returns, and other documents.

Without all the required paperwork, a judge might dismiss your bankruptcy case or you might face other penalties.

Four: Taking On New Debt

You might be tempted to take on new debt in the months leading up to the bankruptcy filing, like using credit cards or taking out new loans.

This is a big no-no in bankruptcy. It looks really bad to take on new debt and then immediately try to have it forgiven.

As a result, incurring new debt just before filing for bankruptcy can be seen as an attempt to defraud creditors. It can result in the dismissal of your case or even criminal charges.

tax lawyer TNFive: Not Planning for Life After Bankruptcy

If you don’t plan correctly once you get out of debt, you could wind up right back in the same place down the road.

We’ve seen it too often: people just want to know how quickly they can file and what it costs, without thinking about how to prevent future problems.

Will you be able to get a house after bankruptcy? A car? Will bankruptcy hurt your job? And how will you rebuild your credit?

To help our clients answer these important questions, we published a free report called Life After Bankruptcy.

Darrell Castle downtown Memphis attorneyAvoid the Biggest Bankruptcy Mistakes with the Right Lawyer

You don’t need to make the biggest bankruptcy mistakes, because we’re here to help.

As a Memphis bankruptcy attorney, I’ve worked with thousands of people who need to get out of debt. We’ve helped them avoid all the biggest pitfalls. What’s more, we’ve helped our clients come out on the other side stronger and more prepared than ever.

We can help you, too. And if you aren’t sure, our free consultation can answer your questions.

File bankruptcy the right way, with the right support. Contact us today at 901-327-2100 or fill out the form below.

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