When you file for bankruptcy, it is important that you provide all of the correct information. This will help ensure that your case does not get thrown out, leaving you in a worse financial position than you were to start with. Here are a few common mistakes that people make when filing for bankruptcy that you are going to want to make sure that you avoid making if you want your case to go through without any issues.
#1 Leaving Out Income
You want to be very careful about the income that you report. You don't want to leave off any income off your report. It is easy to include the money that you make from your job. However, it is easy to forget that the interest that you collect on your investments is also a form of income. Make sure that you include all money that you make from investments when you declare your income. If you work for yourself, it is vitally important that you keep track of all of your income and accurately report everything; don't leave off cash-payments from your income total or try to hide how much you really earn.
Additionally, if you get income from anywhere else, even a one-time source like prize money from a raffle that you won in the past year. Make sure that you declare it as well. The amount may seem trivial, but to the courts, it is about your ability to be honest about where all of your income is coming from.
#2 Failing To Identify Vehicles
Next, you need to identify all of the vehicles that you own. That includes that old car that is just sitting on your property that you don't even have insurance on because you have not driven it in over a year. It includes the classic car that you have sitting in your garage that you are working to restore, as well as the ATVs that you take camping with you. Don't try to hide any vehicle ownership just because you are afraid that you may be asked to sell that asset to make money to pay off your creditors.
Even if you are asked to sell an asset to make money for creditors, there is usually an option that will allow you to purchase particular assets back, allowing you to keep that old car that carries some big sentimental value for you. It is best to declare everything, and work with the courts to keep the vehicles you really want.
#3 Running Up Credit Card
The way you use your credit card should not change leading up to filing for bankruptcy. If you are already using your credit card to make ends meet and hold you over until you get to your next paycheck, that is fine. However, the way in which you use your credit card should not change dramatically as you get ready to go through bankruptcy proceedings. If it looks like you are running up debt intentionally in an attempt to get it discharged, then you are in for a surprise; the courts know to look for this behavior and will not reward it.
Finally, when you already don't have enough money to cover your obligations, you should not be gambling. If the court finds out that you blew $500 dollars in a casino while going through bankruptcy, your entire case may be in jeopardy. This type of behavior shows that you are not taking the process seriously and could result in your case getting dismissed. It's okay to spend a dollar on the lottery, but serious gambling could jeopardize your bankruptcy proceedings.
You can find out more information from David S. Riehl, Attorney At Law.
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