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Essential Bankruptcy Filing Mistakes to Avoid

Many individuals see bankruptcy as something to be avoided, as it can cause irreparable damage to one’s credit score. In reality, bankruptcy is a useful tool that provides honest debtors with a fresh financial start, discharging them from many unsecured and secured debts. However, it is important to ensure you are filing for bankruptcy correctly in order to avoid severe penalties and serious legal repercussions. Improve your chances of success by avoiding the common bankruptcy filing mistakes outlined in this article.

Don’t Underreport Your Annual Income

The federal bankruptcy court will require you to submit paperwork outlining your annual income when filing for either Chapter 7 or Chapter 13 Bankruptcy. It is important not to underreport this information or leave out part-time jobs, as this may interfere with your ability to file for bankruptcy or result in fraud. In the event that you are claiming someone as a dependent, you will also need to report their income to the bankruptcy court.

Don’t Try to Hide Assets

Individuals who qualify for Chapter 7 Bankruptcy are able to discharge their debts by having their non-exempt assets liquidated. This includes—but is not limited to—collectables, family heirlooms, bank accounts, cash, stocks, bonds, second vehicles, and second homes. Many consumers think that if they leave out some of these items when reporting information to the bankruptcy court, that they can actually keep these items. However, leaving out assets may actually cause the bankruptcy court to dismiss your case completely or prevent you from filing on certain debts in the future.

Avoid Transferring Assets Before Filing

Some individuals think that transferring their assets out of their name prior to filing for bankruptcy can help them keep those items, especially when they are transferred to a family member. Unfortunately, this action is illegal and could result in major consequences.

Are you interested in filing for bankruptcy? Let the bankruptcy lawyers with Cutler & Associates, Ltd. guide you through the process and protect your legal rights by calling our Aurora office at (847) 849-1834. We also provide services in the Schaumburg, Skokie, and Berwyn areas.

More from Cutler & Associates, Ltd.: Bankruptcy Filing Mistakes, Cutler & Associates, Filing for Bankruptcy, Bankruptcy Lawyers, Bankruptcy

Categories: Bankruptcy Blog

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