Mistakes to Avoid Making Before You File for Bankruptcy

Published On: September 8, 2023Categories: Bankruptcy

Petition to file for bankruptcyFiling for bankruptcy is a significant decision that can offer individuals and businesses a fresh start when overwhelmed by debt. However, navigating the bankruptcy process requires careful planning and avoiding common mistakes. If you are considering filing for bankruptcy, there are several significant mistakes that you will want to avoid making. A crucial first step in avoiding these costly mistakes is to hire a lawyer who understands the bankruptcy process and can assist you in making decisions that will help you instead of worsening your legal situation.

Failing to Seek Professional Guidance

One of the most detrimental mistakes of all is failing to consult with a bankruptcy attorney. This type of lawyer will be well-versed in bankruptcy law and can provide invaluable guidance tailored to your specific circumstances. They can assess your financial situation, explain the available options, and guide you toward the most suitable bankruptcy chapter. New York has specific bankruptcy-related procedures to follow as you navigate the process.

Acquiring New Debt

Taking on a new debt shortly before filing for bankruptcy can complicate your case in a major way. Large purchases, cash advances, or balance transfers may be viewed as fraudulent activity, potentially leading to the denial of your bankruptcy discharge. It is essential to refrain from incurring new debt and maintain transparency throughout the process.

Transferring assets

Moving assets around, such as property or funds, to friends or family members with the intention of shielding them from bankruptcy proceedings is a serious mistake. Bankruptcy courts scrutinize asset transfers and may consider them fraudulent if done to defraud creditors. It is crucial to disclose all assets and consult with your bankruptcy attorney on the best approach to protect your interests within the legal framework.

Failing to Disclose Information

Full disclosure is vital when filing for bankruptcy. Failing to provide accurate and complete information about your financial situation, including assets, debts, income, and expenses, can lead to severe consequences. Bankruptcy courts expect honesty and cooperation, and any attempt to conceal or misrepresent information can result in the dismissal of your case or criminal charges.

Not Considering Alternatives

Keep in mind that bankruptcy should be considered as a last resort after exploring all available alternatives. Failing to explore other debt-relief options, such as debt consolidation, can result in unnecessary bankruptcy filings. Discussing your financial situation with a bankruptcy lawyer is the most suitable solution for weighing your options.

Contact a Rockland County Bankruptcy Attorney

For help navigating the bankruptcy process, contact the qualified Hudson Valley bankruptcy lawyer with Law Offices of Robert S. Lewis, P.C.. Call 845-358-7100 for a free consultation.