If you plan to file for bankruptcy soon, it would be best if you took measures to increase your chances of success. It would help if you also avoid things that might impact your application. The best way to know what to do and what to avoid as you prepare to file for bankruptcy is by speaking with a lawyer immediately after you decide to file. When you do this, they can advise you to avoid the following mistakes.
Withdrawing Money From Your Retirement Account
Creditors have a right to acquire your assets or money in your financial accounts to recover their money if you default on your loan repayment. However, they have no right to use the funds in your retirement account to clear your accrued debts. Therefore, your attorney will advise you not to withdraw the money from your retirement account as you prepare to declare bankruptcy. If you do this, your savings will be intact even if creditors get permission to take legal action against you for defaulting payments. However, if you withdraw the money, the bankruptcy trustee might distribute it among the creditors.
Mortgaging Your Home to Pay Accrued Debts
Mortgaging your home to clear accrued debts is a serious mistake that might jeopardize your bankruptcy application. Therefore, before considering this, speak to a lawyer and seek their advice. If you do this, your lawyer can advise you not to burden yourself with a second mortgage because it might worsen your financial situation. Additionally, they will work with you when preparing your bankruptcy application to ensure that you keep your home even after declaring bankruptcy. This might make it more manageable to settle your debt and make your financial recovery much more effortless.
Failing to Provide Your Lawyer With All the Essential Information
Your lawyer relies on the information you provide to advise and assist you in navigating your bankruptcy. Therefore, if you fail to provide them with essential information, they might not know how to protect your interests. Additionally, they might not take the right approach in your case. This might lead to a denial of your application, loss of assets, or you might make a mistake that could lead you to prison. Therefore, if your attorney asks you questions about your finances or other issues, answer them truthfully and conclusively. This will enable them to get the correct information that they can use to allow you to have a favorable outcome in your case.
Contact a bankruptcy lawyer for advice if you plan to file for bankruptcy. Remember to ask them what you should do and avoid in the days running up to your application. This will enable you to avoid mistakes that might ruin your application and make you fail to qualify for bankruptcy.
Contact a local bankruptcy attorney to learn more.
