Common Errors That Can Minimize the Benefits of a Bankruptcy Petition
When you’ve lost your job or suffered a serious injury or illness that makes it difficult or impossible for you to work, you can quickly get in financial trouble. That’s precisely why the American bankruptcy laws were enacted—to help people get a fresh financial start when the unexpected happens. To get the most benefit from the process, there are certain actions you need to avoid.
Make Certain You File the Right Petition
Almost anyone can file a Chapter 13 bankruptcy, which will take a lot of the pressure off you as you renegotiate your outstanding debt. You may, however, qualify to permanently discharge some of your debts under Chapter 7, but you’ll need to submit to the “means test” to determine your eligibility.
Don’t Show Favoritism to Friends and Family
You may have borrowed money from parents, siblings, or a benevolent uncle. It’s natural to want to keep them out of the whole bankruptcy process by paying them back what you owe. If you do, and the bankruptcy court learns of it, it may be considered a “preference,” and the court may require such payments to be returned.
By the same token, don’t give valuable property to a friend or family member so that it’s no longer part of your bankruptcy estate. You can typically sell your property to someone you know, provided you do so at fair market value. Any other transfer of personal property to a close friend or family member may be construed as fraudulent by the court.
Don’t Intentionally Incur Credit Card Debt Immediately Before You File
Any purchases made within 75 days of your filing will carry what is called the “presumption of abuse.” If the purchases, including those made with a credit card, are considered to be for anything other than essential needs, the court may prevent their discharge and may even deem them to be evidence of fraud.
Contact an Experienced Rockwall, TX Bankruptcy Attorney
Let us help you take the right steps and make good decisions when filing for personal bankruptcy protection. At the Law Offices of Carrie Weir, all potential clients are entitled to a free initial consultation. To arrange an appointment, contact my office online or call 972-772-3083. I handle Texas personal bankruptcy filings in Kaufman County, Rockwall County, Collin County, Dallas County, Hunt County, and the surrounding counties.
