When your debt or financial situation seems desperate, filing for bankruptcy is an option. It is a better than trying to keep up with paying the bills despite not having the money to afford them. This legal route informs your creditors that you cannot make payments, which also stops them from bothering you. Filing for bankruptcy, furthermore, gives you the opportunity to start again.
If you decide to take this route, educating yourself about the process is beneficial. It is also important, however, to know the things you should not do before filing.
Providing Inaccurate Information
In the process of filing, you are required to give full and accurate information. You need to provide assets, debts, accounts, and other necessary financial information. Don’t attempt to hide some of them, as this may mean fraud. Bankruptcy lawyers in Provo note that this can prevent discharging of certain debts in the proceeding, which may also result in criminal charges.
Paying or Favoring Creditors
While paying one creditor may seem like the right thing do if you can, this can create problems in the future. You can still pay routine bills, but payments for a single creditor or paying an entire debt means that one creditor was given an unfair advantage over others. This is usually the case when you pay debts to friends or relatives. The court can sure these creditors and take the money away.
Keeping it to Yourself
If creditors are threatening to sue you, it is best to tell them that you are considering filing for bankruptcy. Note that some of them may try to seize assets or garnish wages to discharge debts, which you could avoid with a bankruptcy filing. While you can retrieve assets and money after filing, it can be expensive and difficult. Inform creditors to avoid future problems.
These are just a few of the things you need to take note before filing for bankruptcy. In most cases, hiring an experienced bankruptcy lawyer is beneficial to guide you in the process. An attorney can also help you decide which bankruptcy chapter is right for your situation.