Don’t Risk Rejection: 3 Bankruptcy Blunders to Avoid
Filing for bankruptcy can allow you to have a fresh financial start. Whether you’re part of the average 97% of personal bankruptcy filings or whether your company’s case is one of the three percent of business bankruptcies filed every year, the process can be confusing, frightening, and overwhelming — especially without help from a bankruptcy lawyer. If you have assistance from a qualified and experienced bankruptcy attorney, you’ll most likely be able to avoid some of these blunders by default. However, unexpected circumstances can arise, even with help from one of the best bankruptcy lawyers. You’ll want to do everything you can to make sure your filing goes as smoothly as possible and that the final decision is in your favor. When filing for bankruptcy, here are three potential pitfalls that could occur if you’re not careful:
- You don’t provide correct tax documentation
Requirements for when and how you submit your tax records in a bankruptcy filing varies from state to state. However, if you misrepresent your tax records — or fail to submit them altogether — your bankruptcy petition can be dismissed. Without these tax documents, your debts cannot be eliminated and repayment plans (in the case of Chapter 13 bankruptcy) will not be approved. Be sure to check with your bankruptcy lawyer to make sure you know what you need to provide and what’s expected of you.
- You don’t pass the “means” test
If you’re filing for Chapter 7 bankruptcy, you need to pass a “means” test in court in order to qualify for debt elimination. This test allows the court to determine how much disposable income you have access to. If you have access to too much money, your bankruptcy request may be rejected. A good bankruptcy lawyer can assess whether or not you will qualify for Chapter 7 based on your income. If you don’t qualify, he or she will let you know whether you’d be a good candidate for Chapter 13.
- Your request is challenged
When filing for Chapter 7, discharging of debts is usually granted automatically. However, there have been cases where someone — usually a creditor or trustee — challenges the discharge. If this individual believes you committed fraud or were otherwise dishonest (i.e., you hid assets, made untrue statements about your situation, or fail to appear at mandatory credit counseling), your discharge could be denied or revoked. This is why you need to enlist the help of a qualified attorney, follow all court instructions, and be completely forthcoming about your circumstances.
If you’re considering filing for bankruptcy, contact us today for a consultation. Our team of expert attorneys will help you through this difficult time and decide on the best course of action for you, your family, or your business.