Common Bankruptcy Mistakes
Experienced Bankruptcy Lawyer in Richmond
It goes without saying that bankruptcy is a big deal. And there are a number of classic bankruptcy blunders that can make the process of bankruptcy far more difficult than it needs to be. In order to minimize the damage done, be sure to avoid these classic mistakes:
- Paying off debts with credit cards. When trying to pay off debts, some opt to pay it off using a credit card. However, this doesn't do anything to eliminate your debt, it just relocates it. In some cases, this can be considered fraud and you could leave yourself open to criminal charges.
- Liquidating all or most of your assets: A common knee-jerk reaction to major debts is to begin converting major assets such as vehicles, homes, retirement savings plans, etc. for cash. Depending on the debt and the assets in question, liquidation could be your best option. However, don't sell your grandmother's wedding ring or empty out your retirement savings until you have consulted an experienced, qualified legal professional.
- Providing false information about your income.
- Presuming that bankruptcy gets you out of all debt: There are a few debts that are not discharged such as alimony or child support, student loans and recent tax debt.
- Trying to file bankruptcy without having filed your tax returns: Don't do it. It doesn't work. If you are allowed to begin the process without them, it will be a roadblock at some point during the process and create significant delays.
- Paying back money to family members shortly before filing bankruptcy. The Bankruptcy Trustee may have the right to demand the return of all monies paid to family members so discuss this with your attorney before you make any payments to your family before filing bankruptcy.
- Giving your property away to family or friends shortly before filing bankruptcy. Many times we see that the client has given their car to one of their children prior to the filing of the bankruptcy, because "... it really is his car, it is just in my name because it was too young to own it, or for insurance reasons...." While there is nothing wrong or illegal to give away your property, it is a big problem in bankruptcy. Once a bankruptcy case is filed, the Chapter 7 Bankruptcy Trustee has the right to reclaim property given away, and he can then sell it and pay the funds to the creditors.
There are other mistakes you can make without the assistance of a qualified bankruptcy attorney. If you have incurred more debt than you can pay and are considering filing for bankruptcy, call our office. Our team at Bruce W. White, P.C. is here to serve you and help you navigate the process with as much ease as possible.
Call us today at (804) 288-4328 or contact us to receive a free phone consultation.