When one prepares for bankruptcy, they should avoid certain mistakes. Failure to avoid such errors can result in the diminished effectiveness of a discharge and, in severe cases, complete nullification. Below are some of the mistakes to avoid during a Chapter 13 in St. Louis.
Delaying Filing
When a person faces financial struggles, they are more likely to lose assets through foreclosure, repossession, or garnishment if they delay filing for bankruptcy. It’s important not to put it off until there’s a pending judgment. As soon as collections are initiated or threatened, one should call a bankruptcy attorney for help.
Accruing Substantial Credit Card Debt Before Filing
It’s normal to use credit cards for living expenses when one struggles financially. However, certain credit card purchases within 90 days of a filing may be deemed non-dischargeable. It’s important to tell an attorney if there’s been any credit card activity within the past three months, and it’s equally vital to stop using the cards when bankruptcy is filed.
Transference of Assets
If a person tries to repay a friend or relative before filing for bankruptcy, the court may consider it preferential treatment and they may move to confiscate the funds. Filers may not transfer assets ahead of a bankruptcy, as it may be considered fraudulent.
Paying Unsecured Debts with Retirement Funds
One should not avoid bankruptcy by using a retirement fund to pay an unsecured debt. Qualifying accounts are exempt from inclusion in a bankruptcy estate, which means that the filer gets to keep the money after obtaining a discharge.
Falling for a Debt Settlement Scam
There are many companies making claims of complete debt elimination. However, in most cases, a bankruptcy is the only real way to get rid of debts. The settlement may be costly, especially if the company is unethical. One shouldn’t put their financial future in jeopardy. Instead, they should call a bankruptcy attorney for help right away.
Bankruptcy is a complex process, but the results can be worthwhile. Visit this website to find out how the Law Offices of Steven K. Brown can help obtain the necessary debt relief through an immediate filing of Chapter 13 in St. Louis.
