Due to the complex nature of bankruptcy laws, some filers make a number of errors before even filing their plea at the courthouse. These errors may have negative effects on your bankruptcy and even render you not eligible for bankruptcy. Here are some common errors to avoid.
Continued use of credit
Some folks may make expensive acquisitions with credit a few months or even weeks prior to filing bankruptcy. Additionally, they may as well make payday advances. Yet, carrying out these transactions gives a wrong impression about whether or not you are filing bankruptcy with good intentions. In some circumstances, bankruptcy might even be seen as fraudulent. Even if the court permits the filing, the fact that you have recent debt gives enough reason for creditors to refute.
Transfer of property
In an attempt to protect particular assets, a number of filers may choose to transfer finances or property into the name of another person, including a spouse, relative or child. Nevertheless, if found out, this strategy can lead to bankruptcy fraud enquiry. You can still file for bankruptcy notwithstanding your asset ownership and you may even be able to retain those assets. Therefore, there's no need of taking the risk of transferring the property to another person.
Paying creditors selectively
Many people consider debt as an ethical obligation. So they may think that a debt to a relative, employer or even a friend is more important and decide to pay off these arrears prior to filing bankruptcy. Nonetheless, paying creditors selectively can bring disaster for the filer. Normally, the bankruptcy trustee is accorded the power to sue the person that was paid back as a means to recover these monies for the bankruptcy estate.
Failure to file income tax returns
The tax returns of a bankruptcy filer are vital as a basis of information to undertake the required filings with the bankruptcy court. They basically reveal the filer's present earnings and ownership of particular assets which a filer may attempt to protect. Failure to file income tax returns may see a dismissal of your bankruptcy request.
Providing erroneous information
It is the responsibility of the debtor to submit crucial financial data and filings with the bankruptcy court. Typically, these paperwork as submitted as sworn evidence with the threat of punishment for any form of perjury. In the event that filer intentionally misrepresents information, they face the risk of criminal prosecution.
If you are planning to file for bankruptcy, talk with a bankruptcy solicitor to guide you through the entire process and avoid making the above-mentioned mistakes.