If you are choking on debt with nowhere to turn to, it is important to understand that you are not alone. There are options to give you a fresh start, financially speaking; and one of these options involves filing for bankruptcy.
Bankruptcy can provide the financial relief you need to get back on your feet. To enjoy its benefits, however, you need to steer clear of these mistakes.
Taking too long to start the process
Most people delay filing bankruptcy thanks to the stigma or misunderstanding associated with the process. It is not uncommon to explore options like selling personal items to pay off debts. However, this can only compound your financial woes. Dragging your feet can also give your creditors time to repossess your car, foreclose your home or garnish your payment. As soon as it is apparent that you are struggling to pay your debts, it is in your best interest that you begin your bankruptcy journey.
Providing inaccurate information
Whether you are filing for Chapter 7 or Chapter 13, you will be required to be as forthright as possible when submitting your financial information to the bankruptcy court. Withholding some information, or lying about what you own amounts to bankruptcy fraud. This can lead to your petition’s refusal. Worse still, you might end up facing criminal charges.
Filing the wrong bankruptcy
There are basically two types of personal bankruptcies: Chapter 7 and Chapter 13 bankruptcies. It is important that you know and file the right type of bankruptcy based on your situation. For instance, if you are dealing with unsecured debts like credit card and medical debts, then you need to file for Chapter 7 bankruptcy. However, if you are dealing with secured debts like a car loan or mortgage, then you will need to file for Chapter 13 bankruptcy.
When you file for bankruptcy, you are basically asking the court to either discharge your debts or help you restructure your debts and come up with a payment plan that will work. However, the process can be a lot more complex, and making certain mistakes can prove detrimental to your claim.