Know the Important Do’s and Don’ts of Bankruptcy
Are you struggling to pay your bills? Do you have debt that you cannot repay? If you are having difficulty covering the costs of your necessities and you are setting aside bills for “other” debt because you simply don’t have the income to pay everything, bankruptcy may be a good solution. Consider the following list so you can avoid common mistakes and make the most out of the legal protections offered by bankruptcy
if you do decide to file.
The Do’s of Bankruptcy:
- Seek Competent Legal Advice: Bankruptcy law is complex, and you want an experienced professional on your side. A Board Certified Consumer Bankruptcy Attorney has passed numerous exams, has vast experience, and has been recommended by the Bankruptcy Judge and other attorneys to be awarded the Specialist designation.
- Be Completely Honest with Your Attorney: Answer your attorney’s questions honestly, so they have a complete picture of your financial situation. If you withhold information, you limit your attorney’s ability to represent you effectively.
- Provide Your Attorney with All the Documentation Requested: Your attorney will tell you exactly what documents are necessary for your case to proceed smoothly. Take the time needed to collect them. It’s important.
- Carefully Read Your Bankruptcy Petition : Carefully review your bankruptcy petition for any inaccuracies before signing.
- Be Completely Honest and Forthright on Your Bankruptcy Petition: By signing your bankruptcy petition, you are stating that all the information included is true and accurate. Making false statements could result in your bankruptcy case being dismissed or even criminal prosecution.
- Complete Your Federal, and State Income Tax Returns: Tax return information is necessary for your attorney to represent you effectively. The bankruptcy trustee will also request the information. Failure to provide the documents could mean your debts will not be discharged.
The Don’ts of Bankruptcy:
- Don’t Worry About What People Will Think: Not being able to pay your debts is not a crime or a sign of failure. You have the right to seek relief from debt.
- Don’t Run Up Debts Right Before Bankruptcy: Incurring debt right before filing could result in debts not being discharged or cause the court to deny your bankruptcy completely.
- Don’t Try to Hide Property or Assets: The court could view hiding property or assets as bankruptcy fraud and my respond by dismissing your case, denying your discharge, etc.
- Don’t Borrow From Your 401k or Home Equity to Pay Off Credit Card Debt: Borrowing from retirement accounts could trigger unnecessary tax expenses and tapping a home equity line puts your home at risk.
- Don’t Increase Overtime Hours to Pay Off Debt: Increased hours on the job could disqualify you for Chapter 7 bankruptcy and negatively affect the calculations for your Chapter 13 bankruptcy repayment plan.
- Don’t Negotiate Debt Settlements with Creditors: Paying off a debt at a “settlement” price may trigger tax consequences.
If you are struggling to make your monthly payments or have to pick and choose which bills to pay each month, get in touch. Most bankruptcy offices in the Chattanooga area don’t have a single Consumer Bankruptcy Specialist on staff. Our office is the only office in Chattanooga with Two! They are Ken Rannick and Lou Ann Whaley. We help good people through bad times every day, and we can help you, too.
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