Common Snags When Filing For Bankruptcy

: Chris Lee Law Firm

  Filed under: Filing Bankruptcy

bankruptcy mistakesFiling for bankruptcy is not a process that was intended to be difficult, but it does have very specific guidelines that must be followed. There are times that people unknowingly come into contact with some of the “don’ts” associated with the process, leaving the fate of their case in jeopardy.

Watch Your Step

The bankruptcy court holds the rules and requirements of the process in very high regards and does not look favorably on those who violate or fail to comply.  Besides having one’s case dismissed without a debt discharge, the risk of fraud is high in certain cases.

One of the most detrimental actions a person can take when filing for bankruptcy is failing to complete the petition accurately. Whether intentional or accidental, leaving out information about debts or assets can be extremely damaging to one’s case. the bankruptcy court requires a full list of debts and assets to be reported in order to gain an adequate understanding of one’s financial situation. Lying or forgetting to include any information could be grounds for dismissal or suspicions of fraud.

Similarly, making changes to income, funds or assets prior to filing may also be considered problematic. The court will not allow debts that were acquired within the 90 days prior to filing to be included in the case. Therefore, going on a spending spree prior to filing is highly discouraged and could lead to further review by the court. Cashing out funds or transferring assets prior to filing is prohibited. Any sudden changes to, or attempts to hide, funds or assets when entering bankruptcy may be regarded as fraudulent and could lead to serious consequences.

 


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