If you are struggling with a mountain of debt, a Chapter 7 bankruptcy allows you to resolve yourself of the burden and start your financial life on a fresh slate. However, there are a few pitfalls that one should take care to not fall into when filing for a Chapter 7 Bankruptcy if they want their expected case outcome not to be jeopardized. Here are the 5 biggest mistakes to avoid with Chapter 7 bankruptcy.
1. Filing Too Early or Too Late
Before filing for a Chapter 7 bankruptcy, it is often recommended to take into consideration all options on the table. Filing for bankruptcy is an important decision and carries with it serious consequences. It should only be taken once you are fully sure that there is no better alternative choice.
With that said, delaying the decision to file for bankruptcy when you clearly need it can also be harmful. If you are unable to manage your mounting debt, it is better to declare bankruptcy rather than continue suffering from poor financial health.
If you are unsure about when is the right time to file for your bankruptcy, consider consulting an experienced bankruptcy attorney.
2. Not Making a List of Your Debts
If you have multiple debts, it is a best practice to list them and includes in it their outstanding amount. Neglecting to do so before filing for bankruptcy could prevent you from realizing the outcome you were hoping for.
3. Selecting the Wrong Bankruptcy
Quite many debtors make the mistake of filling for Chapter 7 bankruptcy when a Chapter 13 could likely have been the better choice. For instance, one could be struggling to repay their mortgage but can still potentially avoid foreclosure if their repayment plan is readjusted through Chapter 13.
For more information on which bankruptcy to file for which occasion, click here.
4. Missing the Required Documents
This is a very common mistake that typically occurs when one is filing for bankruptcy without a lawyer. A lot of different documents may need to be submitted along with your bankruptcy petition. If a critical piece of documentation is found missing, it can delay your bankruptcy case or influence a more negative outcome. You can even be charged with bankruptcy fraud if the court mistakenly assumes your intent to have been malicious.
5. Not Hiring an Attorney
While virtually all debtors who file for Chapter 7 bankruptcy obtain a discharge, how much the outcome had been ruled in their favor is another question. If you are concerned about the cost of professional help, consider how much more you could lose in terms of property and assets if you approach the bankruptcy process alone.
The Law Offices of Sean T. Flynn provides personalized legal service and consultation to clients filing for bankruptcy under Chapter code 7 and 13. To schedule an appointment or for any queries, call 512.640.3340 or schedule your free 1-hour consultation today: https://seanflynnlaw.com/calendar/