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What Mistakes Do People Make During The Bankruptcy Process?

Some of the mistakes that people make before they file for a bankruptcy is to try and pay as much of their debt as possible, on their own, only to realize that they cannot keep it up and then wind up filing for bankruptcy.

Another big mistake is to try and play games, i.e. hide their assets by giving things away, entrusting property to someone else’s keeping, or running up credit cards before filing.

Doing it on their own without help is another common mistake.

What Happens If Someone Put Their House in a Relative’s Name or They Paid a Friend Back Preferentially?

Some problems are caused by people transferring deeds to a property through their brother, sister, or some other person. Another problem may be that they closed out the bank accounts and transferred the funds to an offshore account.

Some people pre-plan to file bankruptcy, so they go on a big spending spree and buy large electronic big-ticket items, or they take a lavish vacation to an exotic destination before filing for bankruptcy. This type of conduct can be problematic especially if it occurred over a relatively short period of around 90 days before the filing of the bankruptcy and in some cases, up to 1 to 2 years before the filing of the bankruptcy.

How Far Back Into The Person’s Record Can They Check?

This would depend on the type of transaction we were talking about. With regards to transferring a title to a piece of real property, they can go back as far as 2 years or in real property cases, even 4 years.

How Does Something That Was Done Years Before Count Toward The Legitimacy Of The Bankruptcy?

There would be a presumption that it was fraudulent, although the presumption may be overcome if the debtor could show they did it not know they were contemplating filing bankruptcy during the time when they transferred the property.

Does It Make It Difficult When Someone Is Accused Of Fraudulently Conveying Something?

It is uncommon, but it would really depend on the facts of the situation. Certainly, if the person had an emergency during that time and for whatever reason, they needed to transfer the property to another person, then there might be a reasonable explanation for the transfer. If the person was faced with the lawsuit during or around that time and then suddenly decided they would transfer the property to their spouse or to someone else, then the question would arise regarding whether the transfer was in order to defraud or hinder the creditors in that case.

Does It Cause Issues When Someone Gets A New Credit Card Right Before They Filed And Then Charged It Up Or Took Out A Loan?

Yes. It would be ill-advised to take out a credit card and make purchases or get a payday loan within 90 days prior to the person filing for bankruptcy because those would be presumed to be fraudulent and a creditor could come into court and argue that those debts should not be discharged.

Another big problem is when people fail to list all of their assets in their bankruptcy paperwork. They may decide to selectively leave off something under the impression that no one would find out, but that would get them into some serious trouble because filing the bankruptcy paperwork would be under penalty of perjury.

Someone who failed to list that on the schedule would be committing perjury and they would be faced with a stiff fine and possibly time in federal prison, so it would be very serious.

After How Long Can Someone File Again After Filing A Chapter 7 Or Chapter 13 Bankruptcy?

With some exceptions, there is no limit on how many times you can file bankruptcy. However, your debts can only be discharged within a certain amount of time.

What Would Happen If The Person Only Paid A Percentage?

If your debts were discharge in a prior chapter 13, you won’t be able to receive a discharge in a subsequent chapter 13 unless it is filed at least two years after the first case was filed. Because it usually takes three to five years to complete a chapter 13 repayment plan and receive a discharge, you can usually file for another chapter 13 bankruptcy and be eligible for a discharge immediately after your first case is closed.

If your prior case is a chapter 13 bankruptcy, you must wait six years from the date the chapter 13 was filed before you can file for and receive a discharge in a subsequent chapter 7 case. However, there is an exception to the six-year rule if, in the previous chapter 13, you paid back 1) all of your unsecured debts, or 2) at least 70% of your unsecured debts and the plan was proposed in good faith and your best effort.

What Do People Usually Do Before They Come To See An Attorney About Bankruptcy?

This also varies. Some people try to avoid having to file for bankruptcy because of moral, religious or cultural objections. They tend to bend over backwards to try to stay on top of their credit card payments, their vehicle payments and mortgage payments, and they only turn to bankruptcy once they reach the point where they can no longer continue to balance all of those expenses. This is often a mistake, because they end up making payments when they could actually be saving up in order to get their life back on track.

People sometimes wait for more pressing needs before they come in and file for bankruptcy. For example, they wait until there house is at risk of being foreclosed after a week, the next day, the next month or whenever. However, this strategy rarely works and it is best to meet with someone to discuss and have a plan in place, sooner rather than later.

For more information on Common Mistakes In A Bankruptcy, a free initial consultation is your next best step. Get the information and legal answers you’re seeking by
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