If you’re really considering filing for bankruptcy or planning to do so in the near future, you must prepare in advance. It is extremely crucial to note that if you fail to prepare properly or take even one misstep, you could immensely jeopardize your case. Many debtors have committed errors before filing bankruptcy, with some ending up in devastating consequences. To avoid becoming one of these debtors, here are some important things you shouldn’t do before filing.
Provide Fabricated Information
The court will require you to provide all your financial data to your lawyer or trustee during the initial stage of filing for bankruptcy. This information must be complete, genuine, and accurate since the court will review and evaluate it. Otherwise, the court won’t grant you debt discharge, dismiss your case, or worse, subject you to criminal prosecution.
Not Filing Your Tax Returns
These are extremely vital documents that the court requires as part of your filing paperwork since these will satisfy claims of income tax. In the event that you didn’t file your tax returns in a timely manner, you risk halting the progress of your case.
Rack Up More Debt
In general, the court won’t likely discharge significant debt you racked up within 90 days of your bankruptcy filing. You could even face fraud charges from your creditors. This means that you will be held responsible if you max out your creditors or run up debts with other creditors just because you’re planning on filing for bankruptcy.
Move Assets or Modify Titles
Utah Bankruptcy Pros may agree that doing these prior to filing for bankruptcy might appear to the court that you’re trying to hide specific assets. Failure to report all your assets, even those you’re expecting from a settlement, trust, will, or lawsuit is illegal, adds a seasoned bankruptcy attorney in Provo. Instead, talk to your lawyer regarding asset protection before doing anything.
Pay Specific Creditors and Not the Others
Take note that in some instances and depending on particular circumstances, filing for bankruptcy could actually undo a debt payment.
The best thing to do before filing for bankruptcy is to educate yourself. Brush up on bankruptcy laws specific to your state and seek help from an experienced bankrupt attorney to ensure that you explore all available options for debt relief applicable to your case.