2 Errors You Shouldn't Make During A Bankruptcy Process

Law Blog

Bloated medical bills, unmanageable personal loans, and huge credit card debts can consume you emotionally and financially. To seek relief from such predicaments, you may consider applying for bankruptcy. However, you must be careful not to make mistakes that may get you into problems with creditors and bankruptcy trustees. 

Errors during application might result in lengthy court battles that could prolong the process. Additionally, the court might deny you an opportunity to get financial relief due to these errors. The best way to have a smooth process is by working with a bankruptcy lawyer. An attorney safeguards you from the mistakes listed below.

Depositing Extra Cash in Your Bank Account

You should avoid anything that might indicate that you're not a bankruptcy candidate. For instance, adding money to your bank account might not depict a financial struggle. Essentially, only money from the sources indicated in the bankruptcy application should reflect in your account. That includes your salary and other incoming generating activities.

Your lawyer will advise you to discontinue depositing checks and cash from friends or relatives into your bank account. Besides that, you shouldn't channel funds from well-wishers through the account even if they're trying to help you overcome your financial problems. This mistake might send the wrong information about your financial situation, leading to a denial of the applications.

Transferring Your Assets to Other People

After filing for bankruptcy, the fear of losing your assets might give you sleepless nights. As such, you may decide to transfer some of your valuable belongings to your friends and family members to protect them from auctions. As clever as it might sound, this idea might aggravate the situation. The court might assume that you were moving your assets to lie about your financial situation. In addition to the application denial, the bankruptcy trustee might request the court to hand you a punishment for trying to defraud the state.

The advantage of working with a bankruptcy attorney is that they will prevent asset loss by all means possible. However, you need to open up to them and provide them with a list of all your belongings. That includes items gifted to friends or family members.

Making a mistake during the bankruptcy process can blow your chances of getting financial relief. Besides, it can get you into trouble with the authorities and earn you a hefty fine or a jail sentence. Because of that, it is advisable to work with a bankruptcy attorney. They will help you avoid the errors above and others that could potentially mess up your application.

Contact a law firm that offers bankruptcy services to learn more. 


19 May 2022