San Jose, Calif: What Mistakes To Avoid While Filing Bankruptcy:
- It is not a great idea to Wait Too Long - It is human nature to put off unpleasant events. Foreclosure, repossession and other collection efforts can be stopped by filing bankruptcy. But you have to act before your property is foreclosed. Once the bank takes your home or repossesses your car, it is too late. Get advice…San Jose bankruptcy lawyer Geoffrey Nwosu offers a free and confidential initial consultation to help you make an informed decision before it is too late.
- Failing To List All Of Your Creditors – A common mistake is to try to “protect” someone you owe by not listing them as a creditor. This is a mistake. There is a way to re-affirm a debt after bankruptcy. If you do not list a creditor, then the debt you owe that creditor may not be discharged in bankruptcy. You should list all creditors, even if you have a co-debtor/co-signer or you intend to repay that debt. Don’t “muddy the water”. List all of your creditors.
- Reaffirming Burdensome Debt - You can reaffirm (keep) any of your debts. Do not reaffirm debts that are unreasonable. Doing so will make it difficult or impossible for your to recover financially. Bankruptcy laws were written to give a person a fresh start. You will feel better about your self when you get a fresh start and pay your bills on time. If bankruptcy is the option you choose, accept the relief. Do not weigh yourself down. Get a fresh start.
- Having Too Much Cash – Bankruptcy laws give you a fresh start, but they do not allow you to hold onto a large sum of cash. You are limited on how much cash you can protect in a bankruptcy case. There are many factors that determine exactly how much cash that you can keep. It is advisable to get the advice of an attorney to determine how much cash you can keep on hand or in a bank account. That is why we offer a free initial consultation.
- Filing Bankruptcy Before Large Tax Refund Comes – It can be tempting to try to get a financial “boost” from a tax refund after they receive a fresh start from a bankruptcy. Don’t count on it. Tax refunds are treated just like cash in the bank. As stated above, there is a limit on how much cash you can protect in a bankruptcy case.
- Extensive Credit Card Use Two Years Prior to Filing Bankruptcy- Large cash advances, balance transfers or purchases in the 24 months before filing will be a reason for choosing a Chapter 13 bankruptcy over a Chapter 7 bankruptcy. The legal issue is that the court will consider is whether or not you were increasing your debt at a time that you could not afford to repay it. If the credit card company can show that, then you may be stuck with that credit card debt in a Chapter 7. There are many factors that must be considered before you file bankruptcy. A qualified attorney can help. Be sure to discuss recent credit card activity with your attorney.
- Repaying Family Members, Friends or Business Partners Before Filing – many people try to debts to friends, family or business partners before they file bankruptcy. The court views this as an unfair move on your part and there are consequences to showing preferential treatment to one creditor over another. In a Chapter 7, those “preferences” can be taken back, then distributed to creditors on a pro-rata basis. If the Chapter 7 trustee cannot recover those preferences (the money you paid prior to filing bankruptcy), then he can use that as a basis for objecting to your discharge, which then forces you to come up with the money that you paid. Essentially, you will pay the debt twice. So, don’t do it. In a Chapter 13, all it does is increase the monthly plan payment.
- Transferring Assets – Sometimes people will give valuable assets to a friend or family member prior to filing bankruptcy so that the asset will not be taken by creditors. Assets transferred in anticipation of filing bankruptcy may be recovered by the Trustee in a Chapter 7 as a fraudulent transfer. In a Chapter 13, it would cause your plan payment to increase. Besides, you can protect your stuff while it’s in your possession or control, but not after you have given it to someone. Find a qualified bankruptcy attorney who can give you confidential legal advice.
- Expecting An Inheritance – Property inherited within 6 months after filing bankruptcy is deemed to be part of the bankruptcy estate. If you expect an inheritance, make sure that you discuss this with your attorney.
- Intending On Selling Your House Before Your Bankruptcy Case Is Over – This is only an issue in a Chapter 13 case because it lasts 3-5 years, whereas a Chapter 7 only lasts 90 days. Selling your house while you are in bankruptcy can be very complicated. If you think that you must sell your house before your bankruptcy is discharged, discuss it with your attorney to find alternatives.
Please contact the law office of Geoffrey C. Nwosu at http://www.nwosulaw.com/ or 408-912-5983 if you have any qestions regarding debt relief or bankruptcy. Our bay area bankruptcy lawyers and debt relief attorneys will assist you.