Many people assume that a bankruptcy in Denton, TX is akin to calling up a rich relative for debt help. However, bankruptcy should be viewed as a last resort, and people should only file when it’s impossible to repay debts. When filing, clients should avoid certain errors such as those listed below.
Using Credit Cards During Bankruptcy
When one struggles to meet monetary obligations, it is normal to use credit cards. However, clients should note that certain charges incurred within the 90 days before a bankruptcy filing may not be dischargeable. It’s important for clients to tell the attorney about credit card use during the preparation phase of the case.
Filing When a Tax Refund Is Incoming
One should avoid filing when they’re expecting a tax refund because it’s like having cash in a bank account. If one files for bankruptcy when they are about to receive a refund, it may be garnished to repay debts. Therefore, it is best to wait until the check is received.
Not Listing All Creditors
Another error to be avoided during bankruptcy is to not list all creditors. Clients are personally liable for any debt owed to a creditor who is not listed in the petition. Even if a creditor has agreed to an extended payment arrangement, it’s important to list them when filing for a bankruptcy.
Transferring Assets to Friends and Relatives
Clients are not allowed to transfer funds or assets to family members or friends when filing. Anything transferred ahead of a bankruptcy can be regarded as preferential treatment, and it can be seized by a court-appointed trustee. Ask a local bankruptcy attorney for advice on how to protect assets from seizure during a case.
Not Being Forthright with the Attorney
It is important that clients not withhold information from their lawyer when filing bankruptcy in Denton, TX. Concealing information relevant to a bankruptcy case isn’t only disingenuous, it may be illegal. Filing a petition requires a substantial amount of paperwork, and filers must follow numerous rules. Contact a bankruptcy attorney with the website when planning to file a petition with the local court.
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