Bankruptcy and things you should and should not do

Filing for personal bankruptcy is a last resort act of people with financial problems, but it is important that you do it correctly, as a simple mistake could end up costing you money, property, or even your case. The procedure for seeking debt relief through bankruptcy courts has rarely been easy. The passage of bankruptcy reform legislation of 2005 has made applying for court-ordered debt relief more complicated than ever. The last thing you want when filing for bankruptcy is to have your case tossed out because you did something wrong.

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Below are a few things that will usually get you into trouble:

Hiding or failing to disclose property - Getting caught trying to hide property or money could cost you the benefit of the doubt should other problems arise later. If you attempt to protect assets and get caught, you will be required to explain how that happened. A prevalent practice among filers is to try to preserve assets, either by hiding them or by "neglecting" to mention that they exist. Transferring assets to someone else's name or conveniently neglecting to mention the existence of your summer house will get you into trouble, as forgotten, ignored, or transferred assets always seem to be found.
 

Blowing money - You don't want to be treated as careless; you want some consideration. Do not be taking costly vacations or ordering expensive merchandise in the months before you file, as it could harm your case. If you spend cash recklessly or on nonessentials in the months prior to your application, you could be regarded as someone who is financially irresponsible.

Failing to submit financial paperwork on time - The documentation, filed in full and properly, is even more important than under previous versions of debt relief law. Failing to file on time, along with neglecting to show up for your hearing, will always get you into trouble. Make sure your documentation is correct, thorough, and filed in a timely manner. Current bankruptcy law holds your attorney legally liable for the correctness of the data contained in your financial paperwork. You want the debt relief court to be on your side; neglecting to turn in your documentation the right way won't help in that regard.

Failing to hire an attorney - Unless you are a qualified attorney with bankruptcy cases in your past, you would possibly do harm by acting as your own lawyer. By law, you can certainly file without a lawyer, but why would you? The money you spend hiring an attorney with debt relief experience will save you time and stress.

Applying for relief is not an event that debtors should be excited about. That's what you want, so the best way to achieve that is to be responsible, timely, sufficiently represented, and honest. Under the new debt relief law, a large number of consumers are being permitted to have their obligations eliminated so that they can get a new start. If you can be responsible and forthright, the debt court will be more disposed to see things from your perspective. If not, then you may be repaying those debts for quite a while. That sort of defeats the purpose of filing, doesn’t it?