If you are unable to pay your bills and debt collectors have begun calling day and night, declaring bankruptcy might be a viable solution to your problems. You'll need to meet with an attorney, start gathering all of your paperwork, and prepare to enroll in a credit counseling class. In the meantime, however, there are definitely some things you should NOT do. These actions could cause your bankruptcy application to be denied, or they may slow down the process.
Do not go out and make a lot of purchases on your credit card.
A common mistake people make in the months leading up to bankruptcy is purchasing items they don't need with the reasoning that those costs will be erased when they declare bankruptcy. However, if the judge sees that you have been spending frivolously and stacking up more debt, they may not approve your bankruptcy application, or they may not allow you to include that credit card in your bankruptcy plan. You don't have to stop buying gas and groceries while you wait to apply, but you should avoid buying anything that's not a necessity.
Do not change the financing plans on any of your vehicles or cards.
When debt collectors and your creditors are calling you incessantly, it's easy to give in and agree to a refinancing plan that they're trying to sell you. However, you should avoid doing this. Enrolling in a delayed payment plan or any other type of financing plan they're offering you could just make it harder for your lawyer to track down what you really owe, and to whom. If you can't pay the monthly bills right now, just take a deep breath and wait — the solution is just around the corner, but it's bankruptcy, not an amended plan the credit company is trying to sell you. Stop picking up the phone for debt collectors if you think you may be talked into one of their plans. They'll have to stop calling you once you file.
Do not give items away to family and friends.
Sometimes during a bankruptcy, certain assets, like extra vehicles and expensive electronics, may be seized. In an effort to avoid having to give these items up, you may be tempted to give them away to friends and family. Avoid this. If the judge finds out about the transferred assets, they will still be factored into your bankruptcy, and your application may actually be denied because of your actions. If you had plans to give an item away to family anyways, ask your attorney before doing so. They may advise that you wait until after the bankruptcy to do so.
Do not ignore lawsuit paperwork that you get in the mail.
Since you're declaring bankruptcy, you can stop worrying about the lawsuits that creditors have against you, right? Well, not necessarily. Rather than just throwing the paperwork away, you should turn it over to your lawyer. The cases and claims filed against you could impact your bankruptcy case, even if they ultimately end up being overturned because you're filing bankruptcy. And if you have already filed for bankruptcy and are still getting judgments against you, those judgments may be illegal. It's best to take them to your attorney so they can get in touch with the proper authorities.
Filing bankruptcy can be a long and exhausting process. You want to avoid making the mistakes above so that you don't draw the process out any further. For a more comprehensive list of things to avoid at this stage in the game, reach out to your attorney. They can give you advice that is more specific to your unique financial circumstances. For other resources, visit a site such as georgettemillerlaw.com.
