Filing for bankruptcy could help get you out of a tight financial situation and get you back on track after a major debt. But it could backfire just as easily. Similar to other legal cases, filing for bankruptcy means following specific procedures and meeting certain requirements before the court decides to discharge your debt.
One slope those filing for bankruptcy often overlook is that filing for bankruptcy is a complex process which could easily go sideways if you lack any fundamental knowledge of how the process works or if don’t hire an experienced San Diego bankruptcy attorney to represent you in front of the court. People with neither the expertise nor good representation tend to make mistakes. Sometimes these mistakes could simply delay a case, but other times some of these mistakes could cost you not just more money but your case being denied.
Here’s a list of some of the most common mistakes people make when filing for bankruptcy, how to avoid them and how it could impact your case.
Not Filing for the Right Type of Bankruptcy
If you decide that filing for bankruptcy is the best way out of an unpleasant situation, you have to decide which type of bankruptcy you want to file for. In most cases the choice comes down to Chapter 7 or Chapter 13 bankruptcy.
Knowing which type fits your case the most will cut your costs, allow you to retain valuable assets like your car and can help discharge most of your debt. There are several factors that can help determine whether one type is better for you than the other, including your average income, the amount of debt and the value of your assets.
Not Disclosing All Your Assets
Once you decided which type of bankruptcy you are filing for, you will have to prepare the documents needed for your bankruptcy case. During this process, the person filing has to disclose details about their assets, such as their house, cars, bank accounts and the likes.
If you forget to list some of your assets or – worse off – deliberately try to hide them, you could put your bankruptcy case in jeopardy. Sometimes not disclosing assets can result in the case being delayed, but it can also be viewed as trying to deceive the court. You could therefore be denied your request and even face criminal charges.
Not Taking Advantage of Bankruptcy Exemptions
If you file for Chapter 7 bankruptcy, many of your assets can be exempt from liquidation. These exemptions include assets such as motor vehicles, jewelry, personal belongings, home and furniture, insurance policies, tools used for work and many others. There are many factors that determine the maximum allowed bankruptcy exemption such as age or disability. Not making the most out of these exemptions will mean having to give up more of your assets.
Not Hiring the Right San Diego Bankruptcy Attorney
All of the above mistakes can be avoided if you hire an experienced bankruptcy attorney in San Diego. Someone who’s been in the business for more than 20 years will never make a rookie mistake of omitting an asset or not taking advantage of available bankruptcy exemptions. A good bankruptcy representative is not only well-versed in bankruptcy law but also has a deep understanding of finance. Not choosing a lawyer with these qualifications will likely result in inadequate representation and losing more money and assets.
Chang & Diamond, APC is the leading San Diego bankruptcy lawyer group with over 2 decades of experience and numerous successful bankruptcy cases. For a free initial consultation contact our offices at (619) 312 – 4900.