10 COMMON MISTAKES WHEN FILING A CHAPTER 7 BANKRUPTCY

When filing a Chapter 7 bankruptcy, debtors must disclose all of their assets and debts. These documents are attested to under penalty of perjury and by intentionally failing to disclose all aspects of your estate, which comprises your debts and assets, you risk federal criminal prosecution and dismissal of your Chapter 7 bankruptcy petition.


Debtors also fail to get advice from a bankruptcy attorney before filing, believing that they are following the law and are being clever in hiding certain debts or assets. Here are 10 common mistakes that must never be done when contemplating filing for Chapter 7 bankruptcy:


#1 CHAPTER 7 BANKRUPTCY MISTAKE
Maximizing credit cards and taking out cash. The trustee can ask to look at all your transactions made 90 days before you file. A credit card company may bring this to the attention of the Chapter 7 Bankruptcy trustee as well and may file a suit to determine the non-dischargeability of the debt. If it is determined you had no intention of paying these charges back, you will not be permitted to discharge them.

#2 CHAPTER 7 BANKRUPTCY MISAKE
Continuing to make minimum payments on your credit cards. So long as you have a record of making payments for these cards and can defend against a charge of fraud, this is a waste of money and should be discontinued.


#3 CHAPTER 7 BANKRUPTCY MISTAKE
Selling or transferring property to a family member. This could be construed as hiding an asset and could be voided as a fraudulent transfer under the bankruptcy laws. Most of your property is exempt anyway, unless you are transferring real estate or expensive automobiles.


#4 CHAPTER 7 BANKRUPTCY MISTAKE
Paying back loans to family and friends and ignoring other creditors. Again, the bankruptcy court will look at your transactions for a period of time before you file. You cannot favor one or more creditors over others.


#5 CHAPTER 7 BANKRUPTCY MISTAKE
Do not ignore pending lawsuits or those that have resulted in judgments. A bankruptcy filing only stays a legal proceeding when the petition is filed, so a judgment that places a lien on your property or your failing to appear in court to pay a fine or for any other legal proceeding will result in more work for your attorney and more fees.


#6 CHAPTER 7 BANKRUPTCY MISTAKE
Not listing all of your creditors. It does not matter if you intend to pay back a particular creditor. Merely contact the creditor and let him or her know that you must include them by law and will pay them back after your Chapter 7 bankruptcy is completed and you have been granted a discharge.


#7 CHAPTER 7 BANKRUPTCY MISTAKE
Not listing all your assets. This is a huge mistake. If you own real estate, other than your main residence, or expensive automobiles and fail to list them, you could be charged with criminal fraud, face prison time, and have your bankruptcy dismissed.


#8 CHAPTER 7 BANKRUPTCY MISTAKE
Not listing all your assets. This is a huge mistake. If you own real estate, other than your main residence, or expensive automobiles and fail to list them, you could be charged with criminal fraud, face prison time, and have your bankruptcy dismissed.


#9 CHAPTER 7 BANKRUPTCY MISTAKE
Not taking the compulsory consumer credit education classes. These classes must be taken and not taking them can result in a dismissal of your petition. If you are indigent, you may be able to take them at no cost.


#10 CHAPTER 7 BANKRUPTCY MISTAKE
Not turning over your income tax refund to the trustee upon demand from the Chapter 7 Bankruptcy Trustee. This is also required, although painful, if the refund is not exempt. It is not worth the risk of having your petition dismissed and being relieved from thousands of dollars in debt.