Filing for Chapter 7 Bankruptcy in Memphis? Here’s What Not to Do
If you have debt you can’t pay, Chapter 7 bankruptcy may seem like a great solution. But filing for Chapter 7 bankruptcy in Memphis can be a difficult and stressful process. And if you get it wrong, it can have huge consequences.
If you’re considering Chapter 7, it’s important to be aware of common errors so you can avoid them. Here are the biggest mistakes our team has seen from decades of helping people file Chapter 7 in Memphis:
Filing Without an Attorney
Bankruptcy law is complex, and mistakes can be costly. An experienced bankruptcy attorney can help you navigate the process and prevent major problems down the road. In fact, a good bankruptcy lawyer will help you avoid all the mistakes below.
(For more information on this, see our piece on the danger of doing your own Chapter 7 bankruptcy.)
Failing to Disclose All Assets
One of the most common mistakes you can make when filing for Chapter 7 bankruptcy is failing to disclose all assets to the courts.
You need to list everything you own – including property, bank accounts, and investments – in your bankruptcy petition. Failure to disclose assets can lead to serious consequences, including fines and even criminal charges.
Incurring New Debts Before Filing
It’s important to stop using credit cards or taking out new loans as soon as you decide to file for bankruptcy. Otherwise, it can look like you deliberately took out debt you didn’t intend to pay back. The courts will likely not include those debts in your bankruptcy, and they might even suspect you of fraud.
Transferring Assets Before Filing
Transferring assets to your friends or family members before filing can also lead to serious consequences. The court or others may assume you’re trying to hide something from your creditors.
If you do attempt this, among other consequences, you probably won’t succeed: the bankruptcy trustee has the power to undo the transfers.
Failing to Attend the Credit Counseling Course
The Chapter 7 process requires you attend a credit counseling course. This course is mandatory, and failure to attend can result in your case being dismissed. Make sure you attend the course on time and get a certificate of completion.
Not Keeping Accurate Records
Make sure to keep all financial records, including:
- bank statements
- credit card statements
- and tax returns
Stay organized and up-to-date. This will make the filing process smoother and help you avoid mistakes.
Failing to Follow Court Orders
Once your bankruptcy case has been filed, it’s important to follow all court orders. Just like anyone who appears before the court, you need to remain respectful and do what the judge and court personnel say. Otherwise they might dismiss your case.
Avoiding Common Mistakes with the Right Lawyer
It’s definitely possible to hurt yourself by mistake in the process of filing Chapter 7 — sometimes worse than people even realize. Mistakes could cost you your assets, or you could even be held liable for fraud. But it doesn’t have to be that way if you protect yourself up front.
With the right lawyer by your side, you can avoid these mistakes and get the fresh start you need to move forward.
If you’re considering filing for bankruptcy, talk with our experienced Memphis bankruptcy attorneys who can guide you through the process. We’ve helped thousands of Memphians get out of debt successfully and move on with their lives. And we can help you, too.
Contact us today to get started with a free consultation, no strings attached. Call us at 901-327-2100 or use the form on this page to have an attorney reach out to you.