5 Things to Avoid when Filing for Bankruptcy

You may find yourself in a hard financial situation for many reasons, such as current unemployment, unexpected bills, events, and so on. If your debts are huge, the only way out is to file for bankruptcy. Basically, it is all about getting a fresh financial start and eliminating these debts.If you want to get the most out of this process, make sure that you avoid a number of common mistakes made by other applicants. Another helpful tip is to have a good lawyer at your side.

  1. Don’t lie. Most of those borrowers who decide to file for bankruptcy can qualify. Other people have more effective solutions to solve their financial problems. Take a gavel on a sheet of papertime to evaluate your current situation. Lying to credit companies and courts is the worst thing you can do because your case will be dismissed and you will end up with specific charges and penalties.
  2. Don’t leave out any income. Some people think that their additional job should not be taken into account when filing for bankruptcy, but they are wrong. When taking this step, your entire income should be calculated. If you fail to do that, wait for unpleasant outcomes in the future.
  3. Don’t hide your car. When people don’t want to lose it, they often ask their bankruptcy lawyers not to include their vehicle in the necessary paperwork. However, it is an important asset, so that it has to be listed. Your trustee appointed by the court must be aware of everything you own.
  4. Do not forget about other loans. Your basic responsibility is to inform all of your creditors about your intentions to file a bankruptcy petition. Some of them may have specific requirements that you will have to meet. If you fail to notify credit companies about this step, you risk losing your assets and facing other unwanted complications.
  5. Don’t miss any creditor. You can be sure that potential lenders will find out about your poor credit ratings, so don’t try to hide credit cards and other debts. The good news is that your credit score can be rebuilt as soon as everything is over.

Finally, you need to decide whether it is worth filing for Chapter 7 or Chapter 13 bankruptcy. Each option has its pros and cons and is suitable for certain borrowers. Think about your available income when making this choice. If it is not sufficient enough, you should decide on the first option, and this is when you will get rid of your unsecured debts.