Misconceptions on how bankruptcy works and how your life becomes after filing for bankruptcy have led many filers astray. But true knowledge disintegrates the fear that hardworking people experience in difficult financial times.

Indeed, this branch of the law is complicated, and a layperson is prone to make mistakes. At Davis Law Firm, our family law attorneys can offer guidance and help families deal with bankruptcy issues in Kingston, TN. Asking questions enables you to establish if bankruptcy is the right option for you and the exact type that can solve your money troubles.

Is Property Transfer Before Filing Unlawful?

Fear and misinformation have gotten debt-burdened individuals into thinking that the court sells everything they own when they file for bankruptcy. So, many resort to legally transferring their properties to others in an attempt to save them. But this is unlawful, and a bankruptcy trustee can actually undo the transfers.

The truth is, liquidation may be part of the bankruptcy process – but that should not scare filers. Notably, the current bankruptcy laws are meant to protect you as the debtor. And you will get to keep exempt properties, including your home and cars – up to the limit provided in law. Consult with bankruptcy attorneys in Kingston, Tennessee, and you may realize that it is never that bad.

When I’m I Not Allowed to Transfer Portions of My Tax Refunds?

Many filers think that they may lose their tax refunds and make the mistake of spending them inappropriately. After being in financial distress for some time, you may feel a moral obligation to transfer part of your tax refund to family and friends that have been offering some help. Gifting or repaying can result in:

  • You being denied a Chapter 7 bankruptcy discharge
  • A lawsuit being brought against the family member or friend

You may want to avoid sharing your tax refunds if you plan to file for bankruptcy soon. Besides, Tennessee allows you to keep up to $10,000 in personal property – and this includes your tax refunds. And married couples can keep up to $20,000 cumulatively. Gifting and repaying can happen after your exemptions have been approved and the bankruptcy case has proceeded.

Can I Forget About All My Debts Upon Filing for Bankruptcy?

While bankruptcy takes away all the anxiety and stress that comes with being in debt, it doesn’t take away all your debt repayment responsibilities. Thinking that you can walk out of a bankruptcy hearing debt-free is a misleading thought. Some debts are non-dischargeable, including:

  • Debts related to false representation, fraud, or malicious and willful injury to a person or their property
  • Debts resulting from you driving after using drugs or alcohol
  • Criminal and civil fines payable to a government institution
  • Child support and alimony
  • Certain tax debt
  • Student loans

Notably, if you can prove that the student loan on your list is causing you undue hardship, you can be discharged from it. For instance, a disability that diminishes your earning potential completely is grounds to warrant a discharge. Again, speak to your bankruptcy attorney in Kingston, TN, to know if you meet the qualifications.

The ideal way to manage your debts is to begin by filing for Chapter 7 bankruptcy to relieve you of dischargeable debts. Thereafter, consider filing for Chapter 13 to manage the non-dischargeable debts at rates that you can afford.

Are There Repercussions of Waiting Too Long to File?

The longer you wait to take control of your looming financial problems, the more mistakes you are likely to make. It is generally impossible to make good decisions from a place of stress or anxiety. You might find yourself emptying your retirement accounts to repay credit card debts or taking another line of credit to repay older debts. These temporary fixes may work for the short term, but the debt problem will still catch up with you later.

Waiting too long is risking losing money and property in lawsuits, repossessions, foreclosures, and garnishments. All this is preventable if you speak to a skilled bankruptcy attorney in Tennessee as soon as you feel like you are struggling with your finances. And the initial consultation is absolutely free.

The longer you wait, the harder it will be to stop repossession, foreclosure, or a judgment from being entered. For instance, bankruptcy cannot undo a foreclosure sale that has already happened. And if a court judgment attaches to your assets, the verdict remains even in bankruptcy. Acting fast is ideal for getting the best outcome from your situation.

What Are the Risks of Filing for Bankruptcy Without an Attorney?

When facing financial struggles, many filers think that they can save some money by foregoing the assistance of an experienced Kingston bankruptcy lawyer. However, this can be a recipe for failure, and you may end up spending way more than you had anticipated saving.

You cannot properly file for bankruptcy unless you have detailed knowledge of the complex bankruptcy laws in Tennessee. Bankruptcy petition preparers can help, but the Bankruptcy Code forbids them from offering any legal advice. Thus, they cannot answer your questions, advise on the best decision, or provide any assistance in court. It is as good as representing yourself – only at an added cost, which can be two or three times the cost of a Chapter 7 bankruptcy attorney.

If you file alone, you are highly likely to make mistakes that can have your petition dismissed. For example, a study done in the Central District of California revealed that the court confirmed only 0.4% of the repayment plans of pro se filers. On the other hand, 55% of repayment plans filed through attorneys were confirmed.

A Top-Quality Team Bringing Knowledge and Compassion to Your Case

If you make the above bankruptcy mistakes, the court can deny you the right to file for a certain period. This means that you will miss out on the protections offered in bankruptcy. But you want to get everything right and preserve all your debtor rights.

You can bank on our ability to win through our client-centered approach. We can get you the outcome you deserve when you visit our Crossville and Kingston offices. Reach us at (865) 354-3333 to book your FREE case evaluation today!