If you’re facing overwhelming debt, then bankruptcy might be a viable option for you to obtain relief. After all, a successful bankruptcy petition can help you rid yourself of debt, thereby aiding you in securing the fresh financial start that you want and need.
That said, there are some nuances to the process, which means that mistakes can be made that threaten the outcome that you want. That’s why this week we want to quickly look at some commonly made mistakes during the bankruptcy process that you’ll want to avoid.
Common bankruptcy mistakes
There are a lot of mistakes that you can make when pursuing personal bankruptcy. This includes each of the following:
- Running up credit card debt, as many of the debts that you accumulate within 90-days of filing your bankruptcy petition will be presumed to be non-dischargeable.
- Using your funds to repay your family members rather than other creditors, since your family members can’t be treated any better than any other creditors and these payments can be recaptured by the bankruptcy trustee.
- Pulling money from your retirement accounts to try to pay down debt when these funds are otherwise protected throughout the bankruptcy process.
- Transferring property to someone else with the intent of delaying or defrauding a creditor, as this property can be taken back by a bankruptcy trustee.
- Taking out a second mortgage to pay back creditors, as this could put your home at risk of foreclosure when it otherwise wouldn’t given the protections afforded to it through the bankruptcy process.
Know how to competently navigate your personal bankruptcy
Making any of the mistakes mentioned above can have tremendous implications for your bankruptcy case and your future. To avoid making them, you’ll need to gain a strong understanding of the bankruptcy process and how to navigate it to your advantage. That may sound overwhelming, but there are steps you can take and support that you can secure to ensure that you’re well-positioned for success moving forward.