Bankruptcy, Debt Negotiation, Wills & Personal Injury Representation

Avoid these mistakes in your bankruptcy case

On Behalf of | Jun 27, 2023 | Chapter 7 Bankruptcy

Millions of Americans face insurmountable, overwhelming debt. For some, it can take years or even decades of hard work and sacrifice to climb out of the debt spiral they found themselves in. For others, though, the black hole of debt will never let them escape.

Regardless of your circumstances, you shouldn’t despair about your debt challenges. You also shouldn’t force yourself into hardship for any longer than necessary. That’s why you should consider taking a serious look at whether personal bankruptcy is right for you. Pursuing bankruptcy protection may stop foreclosure of your home and repossession of your vehicle, and it might help you eliminate significant amounts of debt so that you can reclaim your financial future.

But the process isn’t automatic. You’ll have to be proactive in seeking the help that you need and want. But as you move forward with the bankruptcy process, you should avoid some of the biggest mistakes seen in these cases.

The biggest bankruptcy mistakes to avoid

There are several missteps that you can make along the way. Here are some of the biggest that you’ll want to avoid if you want to protect your ability to secure a fresh financial start:

  • Filing under the wrong Chapter: There are several types of bankruptcy that you can seek in your individual capacity. This includes Chapter 7 and Chapter 13. While each of these can provide debt relief, they are very different. For example, Chapter 7 bankruptcy will require you to sell off many of your assets to repay your creditors as much as possible, whereas Chapter 13 bankruptcy may allow you to keep your assets but is more expensive and takes longer to complete. You need to make sure that you choose the bankruptcy path that’s right for you.
  • Waiting too long: A lot of people think that bankruptcy is a sign of failure and that pushing just a little bit harder will get them back on solid financial footing. Sadly, though, for many Americans this simply isn’t possible. And the time that they waste trying to fend off the thought of bankruptcy can cost them a lot of money that they otherwise might be able to keep after completing the bankruptcy process. So, if you’re facing overwhelming debt, then you should think about seeking bankruptcy relief sooner rather than later.
  • Falling victim to bankruptcy myths: There are a lot of misconceptions about bankruptcy. This includes how bankruptcy will impact your credit and be viewed in society. Make sure you have a full understanding of what bankruptcy means for you, as you might find that the long-term impact is far less severe than you fear.
  • Taking on debt after filing for bankruptcy: Once you start the bankruptcy process, you should refrain from accumulating new debt. If you do take on new debt it may be viewed as borrowing money with no intent to pay it back. This very well could be against the law, and it’s going to paint you in a bad light in your bankruptcy case.