Bankruptcy can be life-changing. But it would help if you avoid costly mistakes that could lead to the denial or rejection of your Chapter 7 bankruptcy. It’s becoming way too common for consumers to try and go around bankruptcy laws by hiding or giving away assets before filing.

The courts don’t always take such actions kindly. Apart from dismissing your bankruptcy petition, you could also face criminal charges. With the help of Kingston bankruptcy lawyers, you could avoid these mistakes and eliminate such errors from your petition.

What Should I Not Do When Filing for Chapter 7 Bankruptcy in Kingston?

Once you file for bankruptcy, the court will investigate your past transactions. This period is often 1-2 years but can sometimes be stretched up to ten years. The best thing would be to delay filing for your Chapter 7 bankruptcy until this period expires. But because this isn’t always ideal for many people, you may need the help of an experienced Kingston Chapter 7 bankruptcy attorney for guidance.

Transferring Property Before Filing

This is called bankruptcy fraud. When you transfer assets to your wife, mother, or child for purposes of protecting these assets, you will only be committing a crime. This includes scenarios where you transferred the assets with no motive of skirting the bankruptcy system.

Actions like removing your name from a joint account or a business venture can derail your bankruptcy efforts. An experienced attorney will help you deal with such assets before you can file for bankruptcy.

Favoring Creditors

If you selectively repay loans to friends or family close to the filing time, this may be considered a preferential transfer. You can still pay your normal bills. But if you make an unusual payment to your favorite creditor, you may trigger a clawback lawsuit.

Giving Assets or Money to Your Family Members

If you start giving away cash, jewelry, cars, and valuable stuff to friends and family, it will be seen as a major red flag if you are planning to file for bankruptcy soon. Your plan may be to get it back after filing for bankruptcy. But you may actually end up losing it. If you want to keep the asset, there are ways to do that. You can learn these strategies from your Chapter 7 bankruptcy lawyer in Tennessee.

Withdrawing Your 401(K) Early

Most retirement accounts are exempt from bankruptcy. Some people mistakenly withdraw their retirement funds just before filing for bankruptcy to stash it away or pay off some creditors. But this is wrong and should be avoided. 401(k) accounts, IRAs, SEP and Simple IRAs, Roth IRS, pension plans, and Keogh plans are exempt and can’t be touched in a bankruptcy situation.

Lying About Your Financial Data

You are supposed to give accurate and complete information about your assets, liabilities, and financial history. If you intentionally fail to provide full and accurate information, you may suffer criminal fraud. If paperwork is incomplete, your case will be dismissed. To avoid FBI investigations into your case, work closely with a skilled bankruptcy attorney near you.

Rushing Too Quickly or Waiting Too Long

Chapter 7 bankruptcy can wipe out debt. But you need to figure out if it’s an excellent time to seek this debt forgiveness. You can only receive a Chapter 7 discharge:

  • Once in every eight years
  • After six years have elapsed from your last Chapter 13 bankruptcy

But when you have a wage garnishment in place or a creditor has a lawsuit against you, it would benefit you if you filed sooner.

Filing While Expecting Future Payments

If you’re expecting funds in the future, like an inheritance, future tax refunds, or a future bonus at work are all supposed to be part of your estate. If you expect any money, you should disclose this to your attorney.

Not Consulting with A Chapter 7 Bankruptcy Attorney

Doing your bankruptcy “pro se” or on your own has some challenges. An average consumer will find bankruptcy law in Tennessee too complex. Apart from the ton of paperwork expected from you, you may be faced with motions or adversary actions from creditors. You may even be accused of fraud by a bankruptcy trustee.

For example, if you have a child living with you and the child has a part-time job and is being claimed as a dependent, that income they get may be counted as household income. An attorney is a valuable asset to your case and can help you protect your at-risk assets, advise you on which bankruptcy is best for you, and defend you too.

Other mistakes you must avoid include:

  • Using your available credit.
  • Racking up new debt.
  • Making unusual deposits.
  • Making legal claims against people (considered an asset).

What Mistakes Should I Avoid After Filing for Chapter 7 Bankruptcy in Kingston?

If you’ve filed for Chapter 7 bankruptcy, you are supposed to submit a credit counseling certificate. You are also required to attend a 341 meeting of creditors 20-40 days after filing. The court will dismiss your petition if you fail to participate in this meeting.

Failing to Follow Bankruptcy Procedures

As a debtor, you are to follow the rules and procedures at your local bankruptcy court. You may be required to submit additional documents to your trustee after filing. Seek help from a knowledgeable Kingston Chapter 7 bankruptcy attorney who understands your bankruptcy court’s local rules.

Can Filing Mistakes Cause My Bankruptcy Case to Be Denied?

Many debtors are declared ineligible under Chapter 7 bankruptcy. Sometimes this is because of errors made on petitions, fraud, or lack of attention to detail. Your income, expenses and debt could show that you qualify for a Chapter 13 filing, not Chapter 7.

You must be ready to give honest answers when your Kingston Chapter 7 bankruptcy attorney asks about your finances for an appropriate bankruptcy petition.

Get Professional Help in Your Bankruptcy Filing Process

If you have already made a mistake or still want to file on your own, you will appreciate the help of an attorney who can discover the hidden dangers in your petition. Mistakes can cost you way more than an attorney. consulting with an experienced bankruptcy attorney is a good way of assessing your needs

Our attorneys will go over all details in your petition, deal with the paperwork, defend you, and protect the property you wish to keep. Get in touch with us today, and we will help you avoid mistakes when filing for Chapter 7 bankruptcy in Kingston, TN.