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  • While Filing for Bankruptcy Avoid Making These Mistakes

    While Filing for Bankruptcy Avoid Making These Mistakes

    Bankruptcy can change the way you live. However, if you want it to not affect your life negatively, it is important to know what to avoid prior to filing for bankruptcy. According to lawyers of Los Angeles based bankruptcy law firm Recovery Law Group, many people skirt around bankruptcy laws in order to protect their assets. It is important to understand that the bankruptcy court does not approve of certain tactics, usage of which might result in the dismissal of your bankruptcy petition or filing of criminal charges against you. the latter might cost you dearly, not just in terms of finances but also a time in jail. These are some of the common mistakes you should avoid prior to bankruptcy filing –

    • Hiding your assets

    While filing for bankruptcy, you are expected to declare your income as well as your assets to find out your ability to pay off your creditors. Chapter 7 bankruptcy requires you to pass a means test in which your monthly income should be less than the state median for a household of similar number of members. Since Chapter 7 results in the discharge of all debts, people often hide their assets in order to qualify for it. If bankruptcy trustee discovers you are lying about your assets, this could result in dismissal of your case, or you might be banned from filing for those debts again. Similarly, hiding creditors won’t help you either.

    • Not hiring a lawyer

    Bankruptcy laws are quite complex. trying to handle your bankruptcy case on your might not be the best thing to do. You might end up missing one of the final details which might be the difference between getting your bankruptcy discharged or getting your case dismissed. Attorneys are aware of the various ways in which you can protect your assets. They can also you help you choose the best chapter to file bankruptcy under. Moreover, they can make you aware that certain debts are not discharged even after bankruptcy, such as child support, income tax debt, student loan, etc. It is therefore advisable to contact expert bankruptcy lawyers at 888-297-6023 to get rid of debts.

    • Transferring property to family or friends

    Giving assets to family or friends in order to protect them from becoming a part of your bankruptcy estate, can have repercussions on your bankruptcy case. In case you have sold it at less than the market rate, the deal can be turned over by the bankruptcy trustee.

    • Running up huge credit

    If you run the risk of accumulating a huge amount of debt on credit cards just before filing for bankruptcy, it is construed as fraud. The creditor can challenge the discharge of debts if they believe you were trying to cheat them. This will result in the debts remaining even after your bankruptcy ends. Any credit card purchase made 90 days prior to filing for bankruptcy is not included in the debts. You might have to end up paying those creditors and could also be accused of fraud. Similarly, avoid taking on new debt of you are contemplating to file for bankruptcy.

    • Raiding your pension funds

    Most people do not realize that their pension funds are protected from creditors through exemptions. Using money from those accounts to pay your creditor is a bad move, especially since you are using protected money to pay off debts which might be discharged during bankruptcy. Additionally, paying one creditor while ignoring others is not advisable. Pension accounts like 401(k), IRAs, etc. are exempted and cannot be touched by even bankruptcy trustee.


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    • Know your Bankruptcy Trustee in Chapter 7 Bankruptcy

      Know your Bankruptcy Trustee in Chapter 7 Bankruptcy

      A Chapter 7 Bankruptcy trustee is appointed by the court for every Chapter 7 bankruptcy filed with them. These trustees mostly work in favor of the creditors. The prime responsibility is to go over all the paperwork to ensure that they have been submitted in order, to reverse any recently performed financial transactions that may be invalid in the context of bankruptcy and for liquidating viable assets in order to repay the creditors.

      A bankruptcy trustee is paid a fee by the court for examining all the associated paperwork. In addition to this, if the trustee is able to find assets that can be liquidated, then he can claim a percentage of it too – the assets under purview include those that have been sold or transferred ahead of the bankruptcy. Hence it indicates that the trustee will be more inclined towards the creditors and not the petitioner who is dealing with the bankruptcy situation.

      Here is a sneak peek of the tasks that are generally carried out by your Chapter 7 Bankruptcy Trustee

      1. Meticulous review of the bankruptcy petition – Every detail in the bankruptcy petition is revisited by the trustee. Verification of your claims is also their responsibility and a part of this job requires them to check if you have recently transacted a valuable asset for a lesser price or no money. The trustee also requests that claims are to be backed up with pay stubs, tax returns, bank statements or a list of all assets expenses. They will also need to know which debts are expected to be discharged

      2. Chair of the meeting of creditors – The 341 hearing or the meeting of creditors is presided by the bankruptcy trustee after the Chapter 7 bankruptcy case has been filed. The majority of the questions on your provided paperwork is generally asked by the trustee as the creditors generally do not attend these hearings. If the paperwork is in place, the meeting is generally conducted concisely

      3. Evaluating the viable assets for liquidation – A Chapter 7 bankruptcy trustee evaluated all assets of the petitioner to understand if there are any that can be liquidated so as to pay the creditors. The advantage is that they enjoy a percentage of the money from this liquidation. It has to be noted that Chapter 7 permits certain properties to be exempted from liquidation – home and car equities are common exemptions. The trustee has to work around these exemptions. As most of the cases are ‘no asset’ cases, which means that there are no properties for liquidation, a trustee has the power to question an exemption given to an asset. In those situations, the judge has the final say to determine whether the debtor can avail exemption or not

      The need for a right bankruptcy attorney

      Since the bankruptcy laws are complicated, it generally takes time to process a bankruptcy filing. Loss of time eventually amounts to a loss of money – hence the right guidance helps debtors save time. A right law firm like Recovery Law Group puts to use their experience of streamlining and handling of Chapter 7 bankruptcy filing cases and in turn, save a lot of time for their clients. They regulate the entire ordeal of filing with the correct paperwork, gaining an exemption for their most important assets and also protecting their properties from liquidation.


        *Are you more than 60 days past due on your mortgage?

        *Do you own a home?

        Are you currently working?

        By clicking “Submit”, whether I do or do not purchase any products or services on this website, I hereby give my express written consent to receive calls and SMS/text messages, including calls and SMS/text messages made and sent using automated dialing equipment and/or pre-recorded or artificial voice technology and email, about offers and deals that I wish to be kept informed about from (“Partners”), at the phone number and/or email address provided on this form, including any wireless numbers provided, even if I have previously registered the provided number on any Do Not Call Registry. If I do not make a purchase on this website, it is expressly understood that the Partners retain permission to contact me as specified earlier in this paragraph. Carrier SMS/MMS and data messaging rates apply. I also agree that by clicking “Submit” that I agree to the Privacy Policy and Terms and Conditions.