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What You Need to Know When Filing for Bankruptcy

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What You Need to Know When Filing for Bankruptcy

Bankruptcy law

Filing for bankruptcy offers the opportunity for a fresh start. Whether you eliminate your debts through a “liquidation” bankruptcy under Chapter 7 or “reorganize” your debts under Chapter 13, at the end of the process, you’ll be able to move forward without the financial burdens that are holding you back today.

When preparing to go through the bankruptcy process, there are some important facts you need to know. Learning these facts will allow you to make informed decisions, and it will help you avoid mistakes that could delay the process—or even get you into trouble. Here, consumer bankruptcy attorney Georgette Miller explains 10 key facts about filing for bankruptcy:

10 Key Facts About Filing for Bankruptcy

1. There Are Different Ways to File for Bankruptcy

As a consumer in the United States, you have two primary options when it comes to filing for bankruptcy: you can either file under Chapter 7 or under Chapter 13. Each option has its own benefits and drawbacks, and before you file, you need to make an informed decision about which option is right for you.

2. The Decisions You Make Early in the Process Will Have a Big Impact on the Outcome

When you are going through a consumer bankruptcy, the decisions you make early in the process will have a big impact on the outcome. While this starts with your decision to file under either Chapter 7 or Chapter 13, this is just one of many important decisions you will need to make as you move forward. To ensure that you are able to maximize the benefits of filing for bankruptcy, you will want to make these decisions based on the advice of an experienced consumer bankruptcy lawyer.

3. You Must Accurately Disclose Your Assets and Income

As part of the bankruptcy process, you will be required to disclose your assets and income. This is a step that you must handle very carefully, and you must be sure not to make any misrepresentations. If you attempt to hide assets or understate your income during your consumer bankruptcy, this could lead to accusations of federal bankruptcy fraud.

4. You May Not Sell, Gift or Transfer Assets to Protect Them from the Bankruptcy Process

Just as you may not attempt to hide assets or income during your bankruptcy, you also may not attempt to sell, gift or transfer assets to protect them from the bankruptcy process. This can be classified as a “fraudulent transfer,” and in addition to being undone by the bankruptcy court, fraudulent transfers can also lead to serious federal charges.

5. Many Assets Are Automatically Protected in Bankruptcy

Another reason not to attempt to hide your assets during your bankruptcy is that many assets are automatically protected. This is true even when you file for a “liquidation” bankruptcy under Chapter 7. In some cases, individuals can even keep all of their assets when going through the bankruptcy process—including their house, car, personal electronics and jewelry, and bank accounts. When you hire an experienced consumer bankruptcy lawyer to represent you, your lawyer will help ensure that you do not give up any of your assets unnecessarily.

6. Making False Statements or Falsifying Records Can Get You Into Big Trouble

Making false statements and falsifying records are also mistakes that can get you into big trouble. If you are accused of “knowingly and fraudulently” submitting false information to the bankruptcy court, you can potentially face criminal charges. Here, too, while some people may be tempted to try to improperly take advantage of the process, the reality is that most people can get the complete financial relief they need simply by going through a Chapter 7 or Chapter 13 bankruptcy properly.

7. There Are Different Ways the Bankruptcy Process Can Go

While the bankruptcy process can go smoothly, and while consumers can get the financial relief they need, the process can also go very differently. If your creditors fight to avoid discharge, if they question your ability to pay, or if any of a variety of other issues arise, you can quickly find yourself in well over your head. This is one reason—among many—why it pays to have an experienced consumer bankruptcy lawyer on your side.

8. Filing for Bankruptcy Won’t Necessarily Eliminate All of Your Debts

As you prepare to file for bankruptcy, it is important to ensure that you have realistic expectations. For example, whether you file under Chapter 7 or Chapter 13, filing for bankruptcy won’t necessarily eliminate all of your debts. Still, filing for bankruptcy can be well worth it, and with a reduced debt load, you may be able to get your finances back on track.

9. There Are Several Additional Mistakes You Must Be Careful to Avoid

Along with the mistakes discussed above, there are several other mistakes you must be careful to avoid as well. To learn about these mistakes, you can read: 10 Mistakes To Avoid When Considering a Personal Bankruptcy.

10. There Are Lots of Ways a Consumer Bankruptcy Lawyer Can Help You

Finally, if you are seriously considering a consumer bankruptcy under Chapter 7 or Chapter 13, it is important to understand that there are lots of ways a lawyer can help you. For example, when you hire a lawyer to guide you through the process, your lawyer will:

  • Help you decide whether to file under Chapter 7 or Chapter 13
  • Prepare all of the necessary paperwork
  • Deal with the bankruptcy court and your creditors throughout the process
  • Help you make informed decisions about how to resolve your bankruptcy case
  • Make sure you have all of the information you need as you move on from your bankruptcy

Additionally, while many people have concerns about the costs of hiring a lawyer, getting legal help for your bankruptcy can actually save you money. So, if you think filing for bankruptcy might be your next step, you owe it to yourself to schedule a free, no-obligation consultation.

Request a Free Consumer Bankruptcy Consultation

Are you thinking about filing for bankruptcy? If so, we invite you to get in touch. To request a free, no-obligation consultation with consumer bankruptcy lawyer Georgette Miller, please call 866-964-6529 or inquire online today.