Once you’ve made the decision to file for bankruptcy, it is usually best to take your time to ensure it is done right. It is very rare that a bankruptcy needs to be filed on an emergency basis. Unless you fall into this rare instance, take the time necessary to gather the required documents and wrap up any loose ends before you jump into filing your case and start the process in bankruptcy court.
Taking your time will decrease the chances that you might fall victim to common mistakes made by those who have decided to file for bankruptcy, but even if you take your time (and plenty of it) there are certain things that you should actively avoid in order to see your bankruptcy process runs smoothly. Consider the most common mistakes so you’ll know what to watch out for as you prepare to file.
Top 3 Most Common Mistakes Made Prior to Filing for Bankruptcy:
- Paying Off Money Owed to Family Members: (this is a loan – you can’t “pay off” any one “lender” even if they have the same last name as you). All creditors must be treated the same when filing for bankruptcy. Preferential treatment will cause problems once your trustee gets his hands on your bankruptcy court documents.
- Transferring Assets to Someone Else: Many filers fear the loss of their assets even though they know that their best move is to obtain a “fresh start” by filing for bankruptcy. This fear leads some filers to decide it’s a good idea to transfer assets out of their name in order to “save” them. This is a bad idea. It can have similar ramifications to that of #1 – paying off money owed to family members.
- Failing to Communicate with your Bankruptcy Lawyer: Once you’ve decided to file for bankruptcy, retain an experienced bankruptcy attorney and stay in close communication. Consult them before you do anything notable regarding your assets, your debts, or your finances in general.
It’s hard for many filers to identify exactly what could delay their filing or disrupt the process once it’s underway. Something that seems like nothing can turn out to be a big deal, especially if you aren’t well versed in southern California bankruptcy law. Keep an experienced bankruptcy attorney on your side. Call Westgate Law today.