Mistakes in Filing Bankruptcy - Avoid Them!

Bankruptcy can be filed intelligently with the help of an attorney. Filing for bankruptcy is not as bad as it seems. If you know when and how to file bankruptcy, you can well be out of the crisis in a few years without having to flesh out a lot of money. But if you make a mistake while acquiring your debts or while filing for bankruptcy, the US laws can give you nightmares you wouldn’t want to think of. Listed below are five mistakes you can avoid while filing for bankruptcy

1. Do Not Overuse Your Credit Card - Once you find that your financial condition is in a mess and you need to file for bankruptcy, you should stop using your credit card. This is one of the things that people do not do while filing bankruptcy. If your credit card reflects that you have made luxury purchases amounting to $500 in the last 90 days of filing bankruptcy, they will be considered as non-dischargeable fund. It should also be remembered that cash advances of $750 used within 75 days of filing bankruptcy will also be considered as non-dischargeable fund.
2. Trying To Solve Problems Yourselves - It is human tendency to first fall into a deep pit and then trying to scramble out and solve the problem. But when your problem is financial and you realize you have fallen deep, do not make the mistake of trying to solve the problem yourself. Consult a bankruptcy attorney and file for bankruptcy without wasting time.
3. Liquidating Retirement Account - It is a big mistake to touch your retirement account in an attempt to clear debts. The retirement account is one thing which remains protected in most circumstances under bankruptcy. The bankruptcy laws protect retirement assets under exempt items so do not touch it and weaken your case.
4. Making the Mistake of Transferring Your Property - If you think you are doing yourself a big favor by transferring your property into someone else’s name and stalling bankruptcy, you are hugely mistaken. However, a bankruptcy trustee can help undo the mistake if you had done so to hid assets from creditors. However, this can only work if the transfer happened within four years of filing for bankruptcy.
5. Hiding Facts from your Bankruptcy Attorney - A common mistake many debtors make while consulting an attorney is hiding information. While many think that the lawyer will not understand the problem or by hiding information you can save some items from being liquidated, in most cases the opposite happens. If you hide facts from your attorney you are only weakening your case. He is the best person to understand your problem and it is his duty to find the appropriate solution for you.

While you try avoiding the above mistakes, you should also make sure that you are not ignoring any lawsuit against you while filing for bankruptcy. Ignoring lawsuits are not taken lightly by bankruptcy courts.

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