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Beware of These Common Mistakes Should You File For Bankruptcy

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Feb,26,2018

By:Mike Cibik

 

Beware of These Common Mistakes Should You File For Bankruptcy

You will indeed be amazed to find out that more than 1.5 million Americans file for bankruptcy every year. Recent statistics corroborate these facts that make almost 13% of the population declaring themselves to be broke and in dire need of financial assistance.

 

The instances are not limited to the poor working man on the street. The celebrities have it equally tough and file for bankruptcy on the regular.

 

While understanding why people file bankruptcy is imperative before taking the same road, it also helps to remain aware of the problems that may crop up. Do not make haste, therefore.

 

Wait a while and assess your situation carefully before you initiate the process. It would certainly help to contact a legal professional for understanding bankruptcy and the related nuances instead of inviting trouble.

 

Remember that the courts will go through your records with a fine-toothed comb in order to ensure that you are a candidate who happens to fit the bill. The financial records going back to a year are usually assessed while giving the go-ahead for bankruptcy. Yet the professional is within his rights to look at specific records that go further back in time if he feels the need to do so.

 

Here are some pointers to help you. Make sure to read through them and beware of committing the mistakes

 

  • Credit Cards– They are a luxury. Sometimes, using your credit card can help you make a purchase that you probably don’t have the money to pay for upfront. It’s  best to avoid using the card for buying luxury items once you decide to file for chapter 7 bankruptcy.

    Remember that anything that you buy for more than $650 within 3 months of filing for bankruptcy will be marked as non-dischargeable and would be added to your dues. Taking a cash advance in excess of $850 within 70 days of bankruptcy filing will be treated in a similar fashion. So do lock up your credit card if you want to start anew.

 

  • Property Transfer– It makes sense to forget about any transfer of your property prior to filing for bankruptcy. You could be penalized for hindering the law or for committing a fraud especially if your property was transferred to a family member or an insider.

    You would be well advised against making any major changes to your property too. Chapter 13 bankruptcy can protect your personal property completely, and you do not have to lose your home or vehicle in the process.

 

  • Retirement Account– It would be best to inquire about the exemptions before you decide to go ahead with the filing. A lawyer could advise you on the best way to keeping your retirement & 401(k) accounts intact. There are ways by which you do not have to liquidate them to pay your creditors before you declare yourself to be bankrupt.

 

  • Bank Account – The court is certain to be suspicious of fraudulent activities if there is a regular movement of funds from your bank account during ‘look back’ period. Remember that whatever you retain in your personal account is believed to be yours.

    So do not even try to transfer a large amount out of your fund to repay a friend or family member who may have lent you the money without drawing up an agreement. It is best to have only your money in your account and spend it on the necessities before you file for a specific chapter of bankruptcy.

 

  • Court Appearance – Well, your bankruptcy attorney may take care of the details on your behalf. However, failing to appear in court when a pending case for collection of dues comes up for hearing is not going to show you in the proper light.

 

The collection case is likely to proceed at its own pace until and unless you file for bankruptcy successfully.

 

Timing is all important once you decide to declare yourself bankrupt. Make sure to stop all kinds of financial activities for weeks or months as applicable in accordance with the bankruptcy regulations, however.

 

Get the Help You Need Today

Your attorney will definitely be able to guide you properly at every stage, but you must be completely truthful and lay down all your cards in front of the bankruptcy attorney in order to get the best advice. Cibik & Cataldo P.C. has provided debt-relief services for 35 years to clients throughout Pennsylvania.

 

Our team specializes in chapter 7 and chapter 13 bankruptcy and will  carefully examine your financial situation, provide you with the facts,and advise you on how to proceed. Please contact us at 215-735-1060 for a free consultation.

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