Avoid These 7 Common Bankruptcy Mistakes

: Chris Lee Law Firm

  Filed under: Bankruptcy

Filing for a Dallas bankruptcy is a complicated process. Even if you trust the guidance of an experienced bankruptcy attorney throughout the process, there is room for errors that can ruin your case. By knowing the most common mistakes during the bankruptcy process, you can steer clear of these pitfalls and protect your financial health. Getting a fresh start through  bankruptcy shouldn’t be marred by one of these common mistakes.

Things to Avoid

If you’re considering bankruptcy, don’t make these common mistakes that can negate your chance for a fresh start. Even the most innocent mistakes can create costly consequences. Aside from trusting the guidance of a bankruptcy attorney, avoid common pitfalls such as:

  1.  Running up a credit card. Many people try to take advantage of the bankruptcy process by running up a credit card, thinking that the debt will be discharged. However, debts incurred within 90 days of a Dallas bankruptcy filing aren’t dischargeable. Furthermore, knowingly creating debt with the intention of discharging it is fraud.
  2. Delaying difficult decisions. Whether it’s the decision to begin the bankruptcy process or to change spending habits, many Americans tend to procrastinate on important financial decisions. Unfortunately, this delay only allows the situation to get worse.
  3. Using retirement savings to pay debt. Retirement savings are called retirement savings for a reason. Leave your 401(k), IRA, and other accounts alone. They can’t be touched by a Dallas bankruptcy anyways.
  4. Not listing all your creditors. Many individuals either forget or purposefully don’t list all of their creditors during the bankruptcy process. Of course, if something is unlisted, it cannot be discharged through a Dallas bankruptcy.
  5. Concealing assets. If you conceal assets in an effort to protect them from the bankruptcy process, you’ve just committed a federal crime that can earn you jail time. Be honest and don’t leave off anything.
  6. Not hiring a bankruptcy attorney. A Dallas bankruptcy attorney can help you make difficult decisions such as knowing whether to file for a Chapter 7 or Chapter 13 Dallas bankruptcy. They also know the law thoroughly and can help you navigate the trenches.
  7. Avoiding credit report rehabilitation. After the bankruptcy process, it’s important to begin rebuilding your credit so that your fresh start is as smooth as possible.

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