Common Bankruptcy Mistakes
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There are a number of mistakes that can be made prior to filing for
bankruptcy that may make
the process more difficult, or preclude a person from filing entirely. Examples of
common bankruptcy mistakes include:
Ignoring pending lawsuits - Many individuals believe that it is not important for them to respond
to creditor lawsuits if they are planning to file for bankruptcy. Lawsuits
will continue move forward until one's bankruptcy petition is approved,
so it is wise to respond to all legal action in order to avoid liens and
other lawsuit judgments. In the event a lien or judgment is entered bankruptcy
will eliminate them but it will typically extend the bankruptcy process
and increase expenses.
Transferring property out of one's name - Some individuals may believe that they can protect the loss of certain
property, such as
homes or cars, by transferring it to a family member before filing for bankruptcy.
A bankruptcy trustee can reverse a property transfer, making such attempts
unnecessary. It should be noted that it is extremely rare that any asset
is lost in bankruptcy, thus trying to transfer property is unnecessary.
If you do attempt to transfer property, the transfer can be undone by
the trustee and will lose its exempt status. Transferring property could
thus have the opposite effect, if you transfer an otherwise exempt asset
(one you could keep) the trustee may be able to undo the transaction and
then keep the property.
Running up credit cards or taking cash advances - Certain debts incurred within 90 days of filing for bankruptcy cannot be
discharged. Attempting to use one's
credit cards recklessly before bankruptcy may just result in one being obligated to
pay exorbitant charges. Also, any debt that was incurred outside the 90
days may not be dischargeable if you attempted to run up debt and then
wait the 90 days.
Paying loans to friends and family while neglecting creditors - Bankruptcy does not allow a person to treat one creditor with preference
over another. If an individual has made payments to a family member within
one year of filing for bankruptcy, a bankruptcy trustee could take action
to retrieve that money and distribute it evenly amongst the individual's
If you are considering bankruptcy, it is important that you contact a
Worcester bankruptcy lawyer who can help you avoid mistakes that may complicate the process for you.
Bankruptcy Attorney in Worcester
The legal team of the Law Office of Robert W. Kovacs, JR. is intimately
familiar with bankruptcy law. We know what to do and what not to do when
filing for bankruptcy, and we use that knowledge in effectively guiding
our clients through their bankruptcy proceedings. We are available to
provide you with advice and information in your bankruptcy case that will
maximize your chances of a swift and successful filing.
Contact a Worcester bankruptcy attorney who can assist you in avoiding the mistakes that may decrease your chances
of successfully completing your bankruptcy.