If you’re finding it increasingly difficult to keep up with your debts, Chapter 7 bankruptcy may provide a way out, allowing you to discharge most accounts and start your financial life over again. However, it’s a complex legal process with potential pitfalls that could leave you responsible for some debts or cause your case to be dismissed entirely. Below are a few steps to take and common mistakes to avoid if you’re considering filing.
Claim all your exemptions.
While the trustee may seize some of your assets in exchange for discharging your debts, each state allows you to exempt a wide range of assets. In fact, many Chapter 7 filers can get the debt relief they need without surrendering any property at all.
Time your filing correctly.
If you’re expecting a tax refund, an inheritance, or a bonus from work, the trustee could seize those funds even after the bankruptcy has cleared. In general, it’s best to wait until you’ve received and used that money to support your family to file your petition.
Make major purchases.
When you file your petition, the trustee will look back over your finances for the previous 90 days. Major purchases, especially if you used a credit card, can trigger suspicions of fraud and complicate your case. In some instances, the trustee may exempt those purchases.
Transfer money or assets.
Many borrowers try to conceal assets from the trustee by transferring title to a friend or family member. Or you may decide to give away a valuable belonging if you believe you’ll lose it in the bankruptcy. However, the trustee has the power to unwind those transactions and seize those assets, so it’s best to avoid transferring any assets before filing.
Filing for bankruptcy protection can be a complex, confusing process, but an attorney can guide you through the system, maximizing your benefits and helping you avoid common mistakes. The Law Office of J. Baron Groshon has nearly 30 years of experience helping distressed borrowers throughout Charlotte, Concord, Gastonia, and Lake Norman, NC, get the debt relief they desperately need. Visit their website for more on their Chapter 7 bankruptcy services, follow them on Facebook for tips and updates, or call (704) 342-2876 to speak with a lawyer and schedule a consultation.