What to Avoid when Filing for Bankruptcy, Part 2

In case you have plans to file bankruptcy, it is advisable that you get prepared ahead of time and avoid making mistakes that may delay debt relief or even jeopardize the outcome of your case. For this reason, it is recommended that you consult a bankruptcy lawyer San Diego residents trust. A dedicated and skilled attorney will educate you about your rights and provide you with all the information about declaring bankruptcy.

Coping with the emotional aspects of having to file for bankruptcy can be difficult and it can lead to a number of mistakes, especially if you don’t have legal help. Those mistakes are not always intentional. Luckily, they can be avoided.

Transferring assets

Do not change titles or move your assets prior to bankruptcy. If you transfer your property out of your name before filing, it may seem that you are trying to hide your assets. A bankruptcy trustee has the right to undo the transfer.

A trustee can legally undo a transfer made within up to four years of the filing if the action is considered fraudulent. The trustee can do it on the grounds of actual fraud, if the debtor transferred assets with the intent to defraud, hinder or delay a creditor, or on the grounds of constructive fraud, if the debtor was insolvent at the time of the transfer or there was no reasonably equivalent value in return.

Even if your intention isn’t to hide assets, the trustee could bring an action to get your asset(s) back into the estate and revoke any discharges. Don’t put your bankruptcy case at risk and make changes on your own. Instead, turn to a well-versed bankruptcy lawyer San Diego residents can rely on. With the adequate use of bankruptcy exemptions, they can help protect most personal property.

Running up new debt

Do not sign up for cash advances or run up your credit card balances before you file bankruptcy. The chances are you will have to repay your debt. Credit card debt is unsecured so you get to discharge it either through Chapter 7 or Chapter 13 bankruptcy.

Moreover, you may end up being liable for racking up a huge amount of debt if you max out your creditors within 90 days of filing. This means that you did it because you knew that you were about to file bankruptcy. The creditor would have to prove that you have committed fraud.

Draining your retirement account

A common mistake that many people make is to liquidate a retirement account in an effort to pay down existing debts. Retirement accounts are generally protected during bankruptcy, so rest assured your retirement funds will be off-limits to creditors. Also, some of the debts you might want to pay with these funds could end up being discharged through bankruptcy.

Not working with your bankruptcy lawyer San Diego

Your lawyer needs to know all about your income, assets and debts in order to assess all options, mitigate any risks and guide you through the entire process. If you are looking for a bankruptcy lawyer San Diego residents rely on, reach out to the San Diego and Riverside County bankruptcy law firm of Chang & Diamond, APC for legal assistance and representation. Call us at (800) 718-8118 or (619) 312-4900 – today!

Five Bankruptcy Mistakes That Could Cost You Your Case

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.