Filing for bankruptcy provides individuals an incredible opportunity to experience a fresh financial start, but even the smallest mistake can ruin the benefits you would have otherwise received. Though working with a Cincinnati bankruptcy attorney provides guidance as you’re filing for bankruptcy, there are still many responsibilities you must embrace. By familiarizing yourself with the three most common mistakes made when filing for bankruptcy, you can ensure that you receive the benefits you deserve.
Filing for Bankruptcy Properly
Working with a bankruptcy attorney ensures that your filing is accurate and legally appropriate. However, filing for bankruptcy is a complex procedure that you must appropriately approach. Be sure to avoid these common mistakes debtors make when filing for bankruptcy:
1. Procrastinating. Waiting too long to meet with a bankruptcy attorney gives your creditors an opportunity to seize your assets. A garnishment or levy could be waged against you, creating a complex situation you could have avoided, had you met with a bankruptcy attorney sooner. The purpose of filing for bankruptcy is to avoid these challenges, so be sure to prevent them before they become an issue.
2. Tapping into savings. Many individuals will deplete their IRA or 401K plans to repay their creditors and avoid filing for bankruptcy. Had they met with a bankruptcy attorney, however, they would know that these assets are exempt from the bankruptcy process. They could have eliminated their debts with the help of a bankruptcy attorney and have kept their retirement funds. There is no reason to deplete your savings instead of filing for bankruptcy.
3. Racking up debt on purpose. When individuals know that they are about to file for bankruptcy, they’re tempted to make large credit card purchases because they know it will be discharged. However, knowingly making a purchase with the intention of discharging it through bankruptcy is considered fraud. Be sure to discuss your financial actions with your bankruptcy attorney prior to filing for bankruptcy to ensure that everything you’re doing is legal and won’t have any unintended repercussions.