While contemplating what to write about next on the subject of personal bankruptcy, I started thinking about conversations I’ve had with many customers or prospective clients. Every client’s situation is unique but it seems that common problems keep arising. Below are bankruptcy errors:
1. The credit card run-up sin:
When Congress was considering what debts should not be permitted to be discharged, so they put this issue right at the front of the line (actually it had been second in line to a certain type of taxes)! Consumer debts that are incurred for luxury goods or services over $550.00 within 90 days before filing a bankruptcy petition are presumed to be nondischargeable. Additionally, if you get cash advances in an amount over $825.00 over 70 days before filing bankruptcy the debt incurred will be presumed to be nondischargeable.
There has been a good reason Congress created the law what it is today. Think about the word fairness. Would you think it is fair for somebody to come to you to borrow money when they had no intention of paying you back? That is what would happen if Congress allowed people to release debt that they incurred on the eve of filing bankruptcy. I don’t personally have any sympathy for the credit card companies but at precisely the same time, I’m a proponent of legislation being passed to prevent individuals from blatant theft. Any bankruptcy attorney would suggest that you quit using your credit cards even when you are currently thinking about filing bankruptcy. Odds are if you are reading this article you should stop using your credit cards. There are ways to resolve this problem if it has already occurred.
2. The refund a household member sin:
Here is the bottom line – when it comes to repaying debts, you can’t deal with a family member any better than you would any other lender. An important thing to learn about this sin is that the bankruptcy trustee can go to the relative and create the relative turn over to the trustee any amount you repaid the relative within one year of filing bankruptcy.
3. The transferred property out of your title sin:
After the customer figures out they can exempt only 1 car, the client has an epiphany and decides to move all but one car out of their title. Normally, they get a friend or even a family member to select the title for these vehicles. The majority of the time they intend to move it back in their name and don’t get any money for the vehicle. I really should charge some sort of further fee to customers who choose to make this error because it is such a kick in the gut once I have to stop everything from your case to assist them to reverse what they have done. 1 consequence involves the bankruptcy trustee liquidating the home, taking the property, undoing the transfer of the property, and using the money. The consequence involves the United States Trustee filing a complaint to revoke the individual’s discharge. It’s never good when a branch of the United States Department of Justice files a federal lawsuit against someone. The rule to remember with this sin is the fact that it is illegal to move land with the intent to hinder, delay, or defraud a creditor. Don’t think that every scheme imaginable has not been attempted. There are several legal and easy ways to manage bankruptcy estate planning. Talk to a qualified bankruptcy lawyer before doing something you may regret.
4. The liquidate/borrow from the retirement account in:
This sin doesn’t get you thrown in jail but is still a certain kick in the gut. Under pretty much every situation, your retirement accounts are usually protected and cannot be obtained from you. Before cashing accounts you have worked so difficultly for and which you have planned on using for retirement, consider filing for bankruptcy. It tears in my soul to observe those who have nothing left after years of cashing/borrowing from retirement plans. Before stealing from yourself, seek help.
5. The line of mortgage to repay debt sin:
This sin is similar to the sin over. Typically, your homestead can’t be obtained from you and is protected. Don’t borrow in an attempt. All this can do is increase your monthly payment and reduce your equity. Your home is an investment that you ought to look at in the long term. Don’t blow it on a short-term fix which might not solve the underlying issue. Also, it can potentially put your home. More, you can frequently file bankruptcy and not lose this precious asset. Filing bankruptcy chapter 7 – Get help here.
6. The failure to appear at court proceeding sin:
Many of my customers found themselves being sued before they filed for bankruptcy. Occasionally a man does the trick that is ostrich and sticks their head in the sand. Not confronting a lawsuit can cause more issues. Problems can include the garnishment of wages which could be uncomfortable and financially difficult. Further problems may consist of discovering that all of the money in your bank accounts has been imposed or”frozen.” This can cause payments to the creditors that you want to pay the mortgage, like your rent, and electric to bounce and cause you considerable overdraft issues.
The largest issue surrounding suits may involve what the judgment itself signifies to your property. In fundamental terms, judgments become liens on the property. This means that if you have a judgment against you and own your house, your home has a lien on it for the quantity of the judgment. This lien prevented or maybe stripped but it is an additional step that requires time and can be a substantial issue when you go to sell your home. Have a bankruptcy attorney do it for you if you’re uncomfortable dealing with the creditor or their attorney.
Another point to make is that even if you decide you will be filing bankruptcy, then you are not fully protected before the case is filed and collection activity can continue. A set case can last until your bankruptcy case is filed.
7. The failure to tell your attorney the whole truth the truth and nothing but the truth is:
Bankruptcy attorneys don’t have crystal balls and are consequently unable to see into the souls of humankind. In any area of the law, your attorney can offer legal information that’s based upon information given by you. Failure to disclose assets, transfers, debts, income, or anything else pertinent to your situation can lead to a loss of resources or denial. We do our best once we fulfill our clients, to reach the bottom of the issues and my clients don’t lie. However, the consequences could be severe when it does occur. Intentionally lying can result in not just the loss of assets but can lead to a denial of all of the above, fines, imprisonment, or even your bankruptcy case.
The most appropriate course of action to avoid the seven deadly sins of insolvency is to look for legal advice regarding your debt and your rights before doing anything. Even if you’ve taken certain actions that you feel may lead to problems as mentioned previously you ought to talk to an attorney to determine the best course of action.