Avoid common mistakes during bankruptcy

Do avoid these common mistakes you make after getting bankruptcy

Many bankruptcy cases in the USA land into deeper troubles because of common bankruptcy mistakes people make. Here are some bankruptcy solutions to avoid bankruptcy problems.

1. Don't lie about your bankruptcy case

Many bankruptcy filers who have been dishonest with their bankruptcy trustee or bankruptcy lawyer end up digging a hole for themselves. They could get into serious trouble when lying about bankruptcy assets, bankruptcy liabilities or bankruptcy income. This could land them into bankruptcy fraud problems. They might lose their bankruptcy benefits if the bankruptcy court finds out that they have been lying about bankruptcy information. The USA bankruptcy laws are very strict for those who commit bankruptcy fraud. Fraudulent filers may be subject to fines and imprisonment, not to mention bankruptcy civil liabilities.

However bankruptcy law is flexible with bankruptcy filers who made bankruptcy mistakes while filing for bankruptcy relief because of lack of bankruptcy knowledge or bankruptcy awareness. The USA bankruptcy laws allow bankruptcy court to revive bankruptcies within 180 days after the deadline for creditors’ meeting if the bankruptcy filer discovers bankruptcy fraud problems on their own and voluntarily disclose them to bankruptcy court. The bankruptcy filer must come clean and admit to bankruptcy court that they have made bankruptcy mistakes and request bankruptcy court approval for reviving bankruptcy case . If the bankruptcy trustee and bankruptcy creditors approve of it, then bankruptcy courts may allow bankruptcy filers to fix their bankruptcies within 2 years after the deadline for filing bankruptcy claims if there were bankruptcy fraud bankruptcy problems.

2. Don't try to hide bankruptcy property

Bankruptcy filers who attempt hiding bankruptcy assets or bankruptcy properties may be subject to bankruptcy prosecution . It could lead them into bankruptcy jail . Some bankruptcy filers even try to hide their family members from the bankruptcy court, for example, by confiscating children’s bankruptcy benefits as bankruptcy trustee cannot touch bankruptcy property that belongs to bankruptcy minors, bankruptcy seniors or bankruptcy dependents.

The bankruptcy law allows bankruptcy filers to protect their bankruptcy property from creditors and bankruptcy trustees within certain constraints . However bankruptcy filers must declare all of their bankruptcy assets and bankruptcy properties in the official bankruptcy forms so that they will be eligible bankruptcy bankruptcy benefits. They must not bankruptcy withhold bankruptcy information from bankruptcy court under bankruptcy penalty of perjury.

3. Don't neglect filing bankruptcy schedules

Bankruptcy filers must disclose all of their bankruptcy assets and bankruptcy liabilities in the official bankruptcy forms that they filed with bankruptcy court . If they fail to do so, then their resulting bankruptcies are not complete bankruptcy filings. Such bankruptcy cases can be dismissed or dismissed bankruptcy proceedings for bankruptcy lack of bankruptcy compliance with bankruptcy court filing requirements .

Sometimes bankruptcy trustees may close bankruptcy estate because of bankruptcy filers’ failure to file bankruptcy schedules on time, which means that they could lose their bankruptcy benefits for good.

4. Do not file for bankruptcy repeatedly

People usually become bankrupt after their first attempt to file for one . However some people may think that they can reclaim the bankruptcies by filing again . They are wrong. Such bankruptcy behavior may also lead to the suspension of their driver’s license and professional license .

Bankruptcies are named as such because when you file for them, no matter how hard it is to be financially stable again in the future , the government will never be able to see you file for bankruptcy ever again .

Types of bankruptcy

For many people, filing for bankruptcy is their only solution because they are in debt because their income cannot support the repayment .

There are various kinds of bankruptcy , the main four being :

1 . Chapter 7 Liquidation

2 . Chapter 11 Reorganization

3 . Chapter 13 Adjustment of Debts

4 . Chapter 12 Family Farmer Bankruptcy

5 . Chapter 15 Insolvency of Foreign Debtors

The most common type by far is Chapter 7, where the debtor can get immediate relief from their debts. Some people file for bankruptcy just to protect them from lawsuits they’ve been served with .

According to the laws, one cannot file for bankruptcy for seven years after you have filed , but most banks deem it as an act of fraud

Some move overseas after filing Chapter 7 as such a move resets the seven year period . You cannot file for bankruptcy again if you have moved to another country after filing Chapter 7 , unless you spend at least 183 days (six months) in the U.S. during the year of filing

The main factors that affect whether one gets approved for bankruptcy are :

1 . Age

2 . Type of Bankruptcy

3 . Length of Credit History

4 . Amount of Credit

5 . Types of Debt

6 . Security Interests in Personal Property

7 . Prior Bankruptcies

What you need to know

You can get out of bankruptcy by repaying your debts in full or making an arrangement to repay what you owe to creditors.

The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA) sets out the criteria for getting a disposable income payment plan order from a judge.

When can you use this approach?

The "means test" makes it harder to qualify for the Chapter 7 bankruptcy, so you may need to use the Chapter 13 repayment plan.

What's involved:

This is a three part process:

1) file a "means test"

2) file a statement of financial affairs

3) file a repayment plan.

The means test

The means test compares your income to the median income for a household of your size in your state.

If you pass, then you can qualify for a Chapter 7 bankruptcy.

If you fail, then the judge will usually dismiss your case or convert it to a Chapter 13 repayment plan bankruptcy.

However , in some cases, the judge will give you another chance to file the Chapter 7 bankruptcy by taking an additional step.

The means test is based on your income and expenses during the six-month period beginning on October 15 of the year preceding your bankruptcy filing.

But it also calculates a national , rather than local, median income.

The statement of financial affairs

After you file the means test, then you must file a statement of financial affairs.

You must list all your assets and liabilities, income for the six months before you filed the bankruptcy petition, expenses, property owned as of the date of filing, and property you acquired between the date of filing and the first meeting of creditors.

The court will review your list to be sure it's accurate and complete.

If you fail to file the statement of financial affairs on time, then the court may dismiss your bankruptcy case.

If you filed it late, then the court may dismiss your case or convert it to a Chapter 13 repayment bankruptcy.

The repayment plan

The final step is to file a repayment plan. You must pay creditors at least the value of your nonexempt property in installments over three to five years.

The repayment plan must be filed with the court before the first meeting of creditors, which is usually about a month after you file the bankruptcy petition.

You must also prepare a statement describing all your debts, including secured and priority claims , income, expenses, property owned as of your filing date, and property acquired after your filing.

Some Glossaries

The statement of financial affairs . All the information that is required in order to file for bankruptcy. [https://www.legalconsumer.com/bankruptcy/]

The means test . An objective test that determines whether or not you can file for bankruptcy under Chapter 7, given your income and expenses. [https://www.legalconsumer.com/bankruptcy/means-test/]

Statement of bankruptcy . The formal request for a court filing to declare an individual bankrupt.

Means test . A means test is used to determine whether or not you can file for Chapter 7 bankruptcy.

Repayment plan . A repayment plan is the term used for a debtor's Chapter 13 bankruptcy. The plan outlines how much of what is owed will be paid, and over what time period.

Repayment plan . The repayment plan is a three to five year payment process by which debtors repay their creditors for the debts they owe.

Repayment plan . A repayment plan is the term used for a debtor's Chapter 13 bankruptcy. The plan outlines how much of what is owed will be paid, and over what time period.

Chapter 13 bankruptcy . Chapter 13 bankruptcy is a repayment plan bankruptcy.

Means test . The means test is an objective test that determines whether or not you can file for bankruptcy under Chapter 7 , given your income and expenses.

Means test . If your income is less than the state median annual household income, then you can file for Chapter 7 bankruptcy.

What Now

Try to avoid the following mistakes when filing for bankruptcy in the USA. Remember, you can't lie about your case or try to hide any property that will be liquidated through a personal bankruptcy proceeding. Don't neglect filing all of your schedules and don't file for bankruptcy more than once without consulting with an attorney first.

We hope these simple tips will help you avoid any common mistakes during bankruptcy. If you need more information on how to get the most out of your experience, sign up for our newsletter and we’ll send you some helpful articles like this one each week.