If you’re dealing with unmanageable debt, then you need to find quick relief. If you don’t, then you might find yourself trapped in a spiral of collections, foreclosure, repossession and stress as you continue to work as hard as possible to claw yourself free of your debt prison. All too often, though, these efforts fail to make any headway, which can leave you overly stressed and fearful of the future.
Personal bankruptcy can offer you real relief. However, to secure the fresh financial start that you want, you’ll have to know how to competently navigate the bankruptcy process. Even though the process might seem simple on its face, it’s actually fraught with nuances and pitfalls that could lead to costly mistakes. If you make an error while pursuing your bankruptcy petition, then you could be denied the relief that you want and need, and you may find yourself subjected to ongoing debt woes that you hoped to escape.
Don’t make these mistakes when pursuing personal bankruptcy
The bankruptcy process might seem easy, but it can be more complicated than you think. So, as you ready yourself to navigate the process, keep the following common mistakes in mind:
- Running up debt: If you’re anticipating debt discharge from your bankruptcy, then it might be tempting to rack up as much debt as possible. But this will only lead to issues with your bankruptcy petition, and it might prevent you from securing the debt relief that you want. In fact, in some situations running up debt prior to filing for bankruptcy can be considered fraud.
- Using your retirement assets to try to pay off debt first: It’s common for people to try to climb their way out of debt as aggressively as possible before seeking bankruptcy. But using funds that are exempt from the bankruptcy process, like your retirement assets, will just force you to spend resources that you would otherwise get to keep even after the bankruptcy process is finalized. So, make sure you understand bankruptcy exemptions and how to use them to your advantage so that you don’t unnecessarily lose needed assets.
- Leaving out assets: When you file for bankruptcy, you’ll need to identify all your assets. If you leave some out, then the court may consider that a fraudulent move on your part once they find out. And they will find out. This could result in additional penalties that are worth more than the debt that you owe.
- Selling assets for less than they’re worth or giving them away: You might think that you can game the bankruptcy system by giving away or selling your assets to people you trust so that you can still enjoy them once the bankruptcy process is finalized. But, again, this could be considered fraud, thus subjecting you to severe penalties. Also, once the bankruptcy court finds out about these transactions, it’ll unwind them and redistribute the proceeds to creditors. Therefore, it’s better to handle your assets right the first time.
Know how to navigate the bankruptcy process in a way that protects your interests
There’s certainly a lot at stake in your bankruptcy. If you slip up, then you could be denied the relief that you want and need. That’s why it’s imperative that you understand the bankruptcy process and how to navigate it in an advantageous way. If you want to learn more about how to do that, then now is the time to educate yourself about personal bankruptcy as much as possible.