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Bankruptcy Mistakes

Bankruptcy Mistakes

Buying a car right before filing for Bankruptcy.

You should not purchase a vehicle before you file for bankruptcy. Depending of the circumstances, buying a car may cause issues in your bankruptcy. A good bankruptcy attorney will be able to counsel and help you, if you have already bought a car. If you have not bought a car and are thinking about buying one, then stop and consult an attorney first. Buying a vehicle before you file is a certain bankruptcy mistake.

Borrowing money from family members to pay off a debt.

Often, people give in to the collectors’ pressure and borrow money from their family members in order to pay off debt. They think that debt owed to family members can be left out of bankruptcy or it is not “real” debt. If you are considering filing for bankruptcy, do not borrow any money. Consult with an experienced bankruptcy attorney first.

Doing a balance transfer before filing can cause issues in your bankruptcy.

Keep the status quo and consult an experienced bankruptcy attorney first.

Charging credit cards or getting cash advances before filing for bankruptcy.

This is a terrible idea and may be a crime! Do not do it and if you have already done it, be sure to disclose all details to your lawyer. This is a huge bankruptcy mistake.

Obtaining 401(k) loans or liquidating your 401(k) accounts.

Your 401(k) is for your retirement. If you have to resort to your retirement savings before it is time for retirement, then that is probably a warning sign evidencing a greater issue. Before you liquidate your 401(k), consult with an experienced bankruptcy attorney. You may have much better options

Keeping relevant information from your bankruptcy attorney.

In order for your bankruptcy attorney to give you a helpful and complete consultation, he or she needs to know all the relevant facts. If you withhold information from your attorney, then your attorney will not be able to properly advise you. If anything goes wrong in your case because some key relevant information was withheld from your attorney, then your attorney will be blindsided, upset, and will most likely seek to withdraw from your case.

Failing to list all your debts, assets, and sources of income.

You must disclose your entire financial picture. This is not optional. Intentional failure to properly disclose this information, is not only likely to harm you, but it is likely to be a crime as well.