Stop doing these things before Wilmington bankruptcy
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For those in Wilmington drowning in debt, bankruptcy might be the best option for you. However, even if filing Chapter 7 or Chapter 13 is a fit solution for your financial problems, there are missteps that could prevent you from getting optimal results. Here’s a look at seven things to avoid if you’re considering filing bankruptcy.
1 - Not filing bankruptcy soon enough
Bankruptcy timing can impact the scale of your debt relief. In some cases, you might want to delay filing and in others, filing as fast as you can might be wise. If you’re facing a creditor lawsuit, foreclosure, or repossession, filing sooner is likely smarter. Judgments and liens complicate bankruptcy cases, so filing in time to stop these actions is beneficial. But when is the time right to file Wilmington bankruptcy? That’s a question for your bankruptcy lawyer to discuss with you.
2 - Draining your retirement account
Far too many Americans don’t have enough saved up for their golden years. Tapping these funds to pay credit cards and medical bills is one of the worst things you can do because this is money you’ve saved over time, has tax implications for withdrawal, and could shortchange you later in life when your earnings potential is lower. If you can discharge debt in Wilmington bankruptcy and leave your retirement savings safe in their nest, that’s likely a better strategy for your financial future.
3 - Providing inaccurate or dishonest information
You never want to lie to a US federal court or one of its officers and this includes your Wilmington bankruptcy lawyer and the Trustee assigned to your case. No amount of dishonesty is okay in a bankruptcy filing. You may face fraud charges, fines, penalties, and even jail time. At every step of the process, provide accurate and complete information. US bankruptcy law is generous with debt relief, but it’s your responsibility to be honest or face the consequences.
4 - Racking up new debt
If you take on new debt within 12 weeks before filing Wilmington bankruptcy, you might face accusations of fraud. When you get into debt, it should be with every intention of repaying it. If you take cash advances, purchase luxury goods, or open new credit accounts just before filing, your spending and purchases could face scrutiny and you might be refused discharge of these debts. For those considering bankruptcy, putting away the plastic is the best approach.
5 - Moving or transferring assets
Hiding cash or other assets from the bankruptcy court is a sure way to land in hot water. You might think it’s no big deal to sign your car over to your spouse if they’re not filing bankruptcy with you, but it is. The only time it’s okay to sell or transfer property prior to bankruptcy is if you sell or trade for market value and the proceeds from the sale or transfer go towards living expenses or paying debt. Any sale or transfer of assets must be disclosed to your lawyer and the court to avoid repercussions.
6 - Selectively repaying debt
Picking and choosing one debt over another before bankruptcy isn’t allowed. For instance, if you have a personal loan owed to your parents, you might want to pay that before bankruptcy. Alternately, you might owe an unpaid bill to your primary care doctor you’ve been seeing for years. The sentiment is understandable, but this is called a preferential payment and the bankruptcy court can demand the funds back from the person or creditor you repaid and that would be even worse.
7 - Not filing your income taxes
It’s critical that you file your taxes in a timely manner, even if you can’t afford to pay the tax man what is owed. Being current on your last few years of tax returns is a requirement of Wilmington bankruptcy and you’ll be asked to sign a form saying you’ve filed your taxes. Plus, once you file your income tax return, if you can’t pay the debt, the statute of limitations starts ticking on how long the IRS has to come after you for the money. Older tax debts may be dischargeable in bankruptcy.
To find out more about the life-changing benefits of bankruptcy, read reviews from clients, then contact the Law Offices of John T. Orcutt. Call +1-919-646-2654 now for a free Wilmington bankruptcy consultation at one of our convenient locations in Raleigh, Durham, Fayetteville, Wilson, Greensboro, Garner or Wilmington.