Surmounting debts can be daunting at times. And probably, the only way you’re left to get rid of your debts is by filing for bankruptcy. However, there are certain key points that you should keep in mind when filing for bankruptcy.
It is noteworthy that the federal courts of the US recommend hiring a bankruptcy attorney to follow the right procedure. Failing to which, your application might be rejected.
On the other hand, you can proceed with your bankruptcy filing on your own, known as Pro-Se bankruptcy. But, then again, there are limitations at play.
In this article, you will find some of the common errors to avoid.
Not Exploring Alternatives
Most of the individuals who file for bankruptcy on their own don’t realize to explore better alternatives. Notably, some alternatives might be less damaging, in spite of being a little more costly. For example, renegotiating debts or short sale of underwater real estate property.
Filing Wrong Bankruptcy
It is noteworthy that under federal laws, there are two types of bankruptcies- Chapter 7 and Chapter 13. In simple terms, Chapter 7 bankruptcy immediately rids the debtors of their dues, which is not the case with Chapter 13 bankruptcy. However, knowing which one to file can be a tricky task. Most of the individuals, therefore, get bankruptcy help now, more than ever. A legal attorney better understands the legal complications and obligations, and can accordingly help decide which bankruptcy to file.
Failure To Submit CoS
A certificate of service, also known as CoS, is to be submitted along with the bankruptcy application by the applicants. This certificate helps establish the fact that you’ve already mailed a copy of a particular pleading to the concerned parties.
Classification Of Assets
Neither including unnecessary assets nor omitting them would help with the bankruptcy. Often, the applicants fail to classify their assets, liabilities, and creditors, when filing for bankruptcy. For instance, real estate property and personal property needs to be classified separately. Debts must also be described as secured or unsecured. Failing to classify these particulars may result in the denial of bankruptcy.
Not Submitting Certificate Of Credit Counseling
Many applicants don’t realize that even if their application is approved, their discharge of debts may be declined. This happens when the debtors fail to submit a certificate of credit counseling. Ideally, the debtors are required to submit the certificate within 180 days of approval.
Incorrect Installment Fee Payments
Although the application form for filing bankruptcy is available free of cost to all US residents, there are processing fees involved. If you decide to pay for the bankruptcy fee in installments, you must fully mention the date, payment amounts, and other details, along with an initial down payment.
Property Transfers Before Filing For Bankruptcy
Another complication to filing bankruptcy is when the debtors transfer their property to their relatives or friends. Ideally, if any such transfers are made a year before filing for bankruptcy, the bankruptcy trustee can sue the friends or relatives to recover the money.
Well, to sum it up, these common errors are enough to make anyone realize how crucial hiring a competent bankruptcy attorney could be. Notably, there are many more such errors that can either lead to denial of your application or lead to some other trouble. So, it is only in your best interest to avoid these errors and have a qualified attorney by your side.
