10 Bankruptcy Mistakes to Avoid
1. Failing to list all Creditors
If you do not list a creditor, they may not be discharged. You should list all creditors, even if you have a co-debtor or intend to repay.
2. Getting a Second Mortgage Instead of Filing Bankruptcy
Many clients put off the inevitable by getting a second mortgage to pay off debt and then end up losing their home when they cannot afford the mortgage payments, or filing bankruptcy and being burdened by the second mortgage.
3. Waiting Too Long
It is human nature to put off unpleasant events. Wage garnishment, foreclosure and repossession can all be stopped by filing your case beforehand.
4. Reaffirming Burdensome Debt
Do not reaffirm (keep) loans that are unreasonable. Doing so will make it difficult or impossible for you to recover financially.
5. Failing to Provide Documents
Failing to provide required documents like your bank statements, pay stubs or tax returns.
6. Filing when you have a substantial Tax Refund pending.
The exemption for tax refunds are limited. You should discuss these with your attorney before filing.
7. Large credit usage shortly before Filing
If you have had significant cash advances, balance transfers or other large credit use within three months of filing, they should be discussed with your attorney beforehand. You should not use any credit cards once you decide to file.
8. Paying large amounts to family before Filing
These “preferences” can be taken back from your family member and distributed to all creditors.
9. Transferring Assets
Assets transferred in anticipation of filing bankruptcy may be recovered by the estate.
10. Missing the Hearing
If you do not attend your hearing, your case may be dismissed with costs to you. You must bring photo ID & proof of social security number to your hearing.
Honesty
Whether due to job loss, illness, divorce or wages that simply do not keep up with increased cost of living, many individuals and families in Iowa find themselves in financial distress.
Constant phone calls, lawsuits, judgments, liens, wage and bank account garnishment, calls at work that can threaten your job security, foreclosure and eviction are all problems Iowa individuals and families find themselves in when overwhelmed with unmanageable debt.
Our Courts and Judges, the United States Trustee’s Office, the Panel Trustees, the Clerk of Court and your Attorney are all interested in assisting honest debtors in getting relief from burdensome debt, getting back on track financially, and planning a brighter financial future.
As a debtor taking advantage of this opportunity, you have an obligation to be completely truthful and cooperative with your attorney and in all other matters related to your case. You must fully and accurately disclose all of your assets, income and all claims you have against others and comply with all document or other requests of the Trustees. The success of my firm and my ability to continue to represent honest, well intended clients depends of my accepting only clients who will take a completely honest approach.
- Jeff Mathias
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