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!

What Bankruptcy Can and Cannot Do, Part 2

bankruptcy attorney CarlsbadIn our previous article, you could find out what can be accomplished by filing for bankruptcy. If you are considering filing for bankruptcy, you should know that, though bankruptcy is a powerful remedy, there are things that it cannot help you with. Bankruptcy is a complex area of law which requires the assistance of a knowledgeable and experienced bankruptcy attorney Carlsbad residents rely on.

Bankruptcy can provide relief if you are unable to repay your debts but it cannot cure your every financial problem.

Eliminate all debt

For the most part, you will be able to get rid of credit card debt if you file for Chapter 7 or Chapter 13 bankruptcy, but be aware that there are types of debt that cannot be wiped out.  Certain debts are eligible for discharge, such as medical bills, personal loans, and civil court judgments. These are unsecured debts, which bankruptcy can eliminate.

Filing bankruptcy won’t be able to help you with debts you forget to list, as well as those for personal injury or death caused by intoxicated driving. Neither Chapter 7 nor Chapter 13 can help you with certain taxes, debts to government agencies for penalties and fines, as well as debts for spousal or child support or alimony.

Keep in mind that secured debt cannot be discharged even if you file for Chapter 7 bankruptcy. As long as you continue to make regular payments to the lender, you will be able to keep your property.

Eliminate tax debt

Sometimes, wiping out tax debt is possible for older debts for unpaid income taxes. There are numerous requirements to be met, so it’s best to consult an experienced bankruptcy attorney in Carlsbad or another are you live.

Until you do, you should know that Chapter 7 bankruptcy usually doesn’t allow debtors to discharge state or federal income tax debts. You may be able to wipe out some of this debt in case you file for Chapter 13 bankruptcy but it would depend on the type, amount and timing of the debt.

Eliminate support obligations

If you are paying child support or alimony, keep in mind that these payments typically cannot be discharged in bankruptcy. Even though you file a motion to modify the order and the judge grants it, your child support or spousal support payments will be reduced but not eliminated. You are still going to be responsible for the full amount.

In Chapter 13 bankruptcy, the debtor is usually required to show how back payments will be paid in full through his repayment plan. In case of spousal support, there are exceptions to the rule if a third party becomes involved in the alimony arrangements or in case of incorrect alimony classification. Arrange a consultation with a skilled Carlsbad bankruptcy attorney to discuss your options.

Eliminate student loan debt

Given that they are considered non-priority unsecured debt, most student loans cannot be discharged when filing for bankruptcy. However, there are some exceptions but certain conditions have to be met first.

In most jurisdictions, the debtor has to prove that repaying the loan would cause undue hardship. Though this may seem easy to achieve, the discharge of your student loan in bankruptcy is a notoriously difficult process.

The debtor has to show an extreme hardship, such as when the person is permanently disabled and will never work again. For this reason, student loans are usually considered nondischargeable debts.

For legal assistance, consult a bankruptcy attorney Carlsbad

Bankruptcy is a complex legal topic that you should discuss with an experienced bankruptcy attorney Carlsbad debtors trust. Contact Bankruptcy Lawyers Chang & Diamond, APC and schedule a free initial consultation at (619) 312-4900 or (800) 718-8118.

We will help you realize what you can and cannot accomplish through bankruptcy, explain the process of filing for bankruptcy, and provide specific information that could help your case.