Filing bankruptcy can bring welcome relief for those dealing with unmanageable debt. Unfortunately, many people take actions before bankruptcy that can negatively impact them in the long term. If you have questions about bankruptcy or need someone to talk you through the process, contact our Charlotte bankruptcy lawyers at The Law Office of Jack G. Lezman for a free and confidential consultation. Call us today at (704) 544-8202.
Avoid these seven things if you’re considering filing bankruptcy in Charlotte, NC:
Obtaining New Debt
When you’re contemplating filing bankruptcy, you’re likely already having difficulty paying bills. It can be tempting to open another credit card or take out a personal loan to cover costs. However, obtaining new debt within 12 weeks of filing bankruptcy can result in fraud accusations. Creditors may allege that you only took on the debt because you knew it would be eliminated through bankruptcy. Avoid this by not opening any new credit cards or taking a loan.
Moving or Transferring Assets
When you file bankruptcy, you will have to list all of your assets, including cash and property. If you move any assets or transfer them into someone else’s name, it may appear that you are hiding assets. You should only sell or transfer property if the proceeds will go towards living expenses or paying current debts.
Repaying Debt Selectively
You may want to repay certain debts that you don’t wish to become part of your bankruptcy. For example, if you owe a personal loan to a friend, you may want to make sure they are repaid before filing bankruptcy. However, this type of preferential payment is not allowed by the bankruptcy court and may result in the court demanding funds back from the creditor.
Avoiding Income Taxes
If you’re worrying about current debts, you may feel like you can’t afford to pay income taxes. However, you must be current on income taxes in order to file bankruptcy, or you may be required to pay the government before your other debts are managed. It’s in your best interest to file taxes, as older tax debts may be dischargeable through filing bankruptcy.
Providing Inaccurate Information
When you file bankruptcy, you must provide a plethora of information. If that information is not accurate or if you’re found to be dishonest, you may face charges of fraud, fines, penalties, and even incarceration. A skilled bankruptcy attorney can review your information and help you provide the most accurate facts about your income, debts, and assets.
Using Retirement Funds to Live or Pay Debts
You may have worked hard to save money for your retirement. However, when debts pile up and paying bills becomes difficult, you may be tempted to use retirement savings to pay creditors. This is not a good decision. You will likely have tax penalties and take money that you will need later in life. In many cases, a bankruptcy lawyer can help you avoid using retirement accounts to pay back debts.
Not Filing Bankruptcy Soon Enough
Most people try to avoid filing bankruptcy for as long as possible. However, digging into your savings and waiting for creditors to take action can have negative outcomes down the road. The longer you wait, the more likely creditors are to file lawsuits, repossess your belongings, and submit foreclosures. When your debt begins to become overwhelming, you should seek the assistance of a bankruptcy attorney who can help you evaluate your situation.
Filing Bankruptcy With the Help of a Skilled Charlotte Bankruptcy Attorney
When you’re facing financial difficulties, you may have many questions about what steps you should take. A Charlotte bankruptcy attorney from the Law Office of Jack G. Lezman can answer all of your questions. Call us today at (704) 544-8202 to find out how we can help you.