Bankruptcy mistakes to Avoid
What is Bankruptcy?
A bankrupt person/business is an individual or entity that is unable to fulfill their financial obligations to creditors. Bankruptcy refers to legal proceedings often undertaken in a Federal Court which are designed to help people with excessive amounts of debts to discharge all or partial amounts that they owe to creditors. Bankruptcy cases can also be a way to help the person/entity in debt to come up with a way to repay some of the money they owe creditors.
Though many view bankruptcy as a way of getting rid of huge debts, there are serious ramifications to filing a bankruptcy case whether you are doing it as an individual or business owner. For starters, once these proceedings have been initiated, your future credit score will be greatly impacted. Second, the fact that you filed for bankruptcy will become a matter of public record which may remain in your personal credit record for between 7 to 10 years.
If you are unable to pay your creditors, there are two types of bankruptcy that you can pursue:
1. Chapter 7 Bankruptcy (‘Straight Bankruptcy’)
Under this type of bankruptcy, a Federal Court trustee will be appointed to oversee the sale of your assets that are not exempted in bankruptcy proceedings such as your property. The money gained from the sale of your assets will then be used to pay the creditors you owe. This type of bankruptcy proceedings usually comes to a halt when you have fully paid all your debts or the case is discharged by the court.
Note that on filing for Chapter 7 bankruptcy, the records will be put on your credit report for a period of 10 years. Further, if you become bankrupt again, you can only initiate bankruptcy proceedings after 8 years.
2. Chapter 13 Bankruptcy
Under this type of bankruptcy, your lawyer and the court will negotiate on a set duration of time within which you should partially or fully repay your debt. In exchange for agreeing to honor your debt, you will be allowed to retain your property. This type of bankruptcy is usually discharged after the repayment period has elapsed whether you were able to fully repay your loan or not.
The records of Chapter 13 bankruptcy proceedings only remain in your credit history for 7 years. Further, if you become bankrupt again, you can file for bankruptcy within 2 years.
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Reasons Why You Should Hire a Bankruptcy Lawyer
Bankruptcy cases involve a lot of legal intricacies and they can be complex depending on your level of debt. Choosing the type of bankruptcy to file for is another complicated task given the heavy ramifications that come with being declared. As a top-tier bankruptcy firm in Erlanger, Kentucky we recommend you engage a bankruptcy lawyer for the following key reasons:
- Your attorney will help you decide the most appropriate bankruptcy proceedings to initiate depending on your unique circumstances
- Your lawyer will handle all the complex court paperwork
- As your person-of-contact, your lawyer will deal with the courts and creditors on your behalf
- Your lawyer will protect you from being harassed by those you owe
- Your lawyer will use their experience to ensure that your bankruptcy case is discharged quickly
- Your lawyer will ensure that all eligible debts are discharged successfully
Top Mistakes To Avoid When Filing For Bankruptcy
There are certain things that you should AVOID doing if you want to get your bankruptcy case discharged quickly. They include:
- Not consulting a bankruptcy lawyer – As mentioned earlier, an experienced bankruptcy lawyer is key to your case being discharged quickly. Not only will a lawyer offer advice on the ‘DOs’ and ‘DON’Ts’ when filing your case, they will also offer many advantages as highlighted above
- Transferring your assets – Hiding assets during bankruptcy proceedings can get you charged with bankruptcy fraud
- Failing to attend meetings with creditors – If you fail to attend court mandated meetings with creditors, your bankruptcy case will most likely get dismissed by the courts
- Making unusual deposits – Any deposits you make to your accounts may be considered as part of the proceedings even if they are from your personal account and the case at hand is about your business
- Racking up debt – If you are planning on filing for bankruptcy, you should avoid taking up any new debts completely. If you take up more debt perhaps when buying luxury items, your creditors may object to the debt being discharged
Other mistakes to avoid include:
– Failure to follow bankruptcy education requirements such as credit counseling
– Failure to follow the right procedures and regulations when filing for bankruptcy
– Using the wrong bankruptcy forms when filing your case
Contact The Bankruptcy Lawyers At W. Ron Adams Law To Get Your Bankruptcy Case Discharged Quickly and Effectively
As you may have deduced from the discussion above, there are a lot of complexities that arise when filing and handling bankruptcy. Your best bet to successfully managing all your debts through bankruptcy proceedings is with the help of skilled and experienced professional bankruptcy lawyers like our team at W.Ron Adams Law.
On contacting us, we will help you choose the best type of bankruptcy proceedings you should opt for, prepare and file your case with the appropriate court, act as your point of contact with all interested parties including creditors and offer you advice on what to do and avoid before, during and after your bankruptcy case.
For over two decades, we have successfully handled thousands of bankruptcy cases across Kentucky. With our extensive experience in handling bankruptcy cases, you can rest assured that your case will be in the safest hands. To get a free consultation with our team of proficient Kentucky bankruptcy lawyers, call us on (859) 727-1000 or visit: wronadamslaw.com.
LET OUR EXPERIENCE GUIDE YOU
Call to schedule your Free Bankruptcy Consultation!