For borrowers struggling with unmanageable debt, choosing to file for bankruptcy can help put you back on solid financial ground. However, declaring bankruptcy is a complex legal process, and even relatively minor errors can leave you responsible for debts you could have cleared, or cause the court to dismiss your petition entirely. Below are a few of the most common errors to avoid.

A Guide to Common Bankruptcy Mistakes 

1. Choosing the Wrong Chapter

The bankruptcy code offers two options for distressed borrowers, each of which is designed for different situations. Chapter 7 allows those without the financial resources to completely discharge most unsecured debts, while chapter 13 is designed to help you make up past-due amounts with a court-managed payment plan. If you intend to file for bankruptcy, be sure the chapter you choose is suited to your circumstances.

2. Not Including All Eligible Debts

In your bankruptcy petition, you must explicitly list all of the debts you wish to discharge or pay back, including credit cards, mortgage, or past-due utility bills. After your case is discharged, you’ll still be responsible for any debts not included in your bankruptcy filing.

3. Failing to Claim Available Exemptions

A chapter 7 bankruptcy does let the trustee of the court seize some of your assets to pay back creditors, but each state allows petitioners to exempt some types of personal property. Failing to claim all of the personal exemptions you’re entitled to could mean giving up some assets you would have been allowed to keep.

4. Transferring Assets

If you know you will eventually have to file for bankruptcy, you might be tempted to transfer assets into someone else’s name or give valuables to a friend for safekeeping. To protect the rights of creditors, the trustee will look back through your financial records for the period before you filed. If they notice any suspicious transactions, they have the power to reverse the transfer and seize the asset.

In tough financial times, the attorneys at William C. Rieth will help you get the debt relief you deserve. Their legal team has been serving the residents of Monroe County, NY, for over 25 years, helping countless clients file for bankruptcy and start their financial lives over. Visit their website to learn more about their services, or call (585) 232-6520 to schedule a consultation today.