 TITLE: Mistakes Made When Filing Ch 7 or CH 13 Bankruptcy CONTENT: Common Mistakes and Errors Made When Filing Bankruptcy\n------------------------------------------------------\n###### Written by: Kristy Welsh\n_Last Updated: October 2, 2017_\nBankruptcy does happen to good people — so don't beat yourself up if you are thinking about filing Chapter 7 or Chapter 13 bankruptcy. Bankruptcy was designed to help those facing insurmountable debt and financial hardship, get a fresh start and eliminate most if not all of their debt. You should never enter into filing bankruptcy lightly and hopefully you have extinguished all other options first.\nBefore you file bankruptcy, make sure to get competent advice from a competent bankruptcy attorney. If you cannot afford to hire an attorney, do your homework first and make sure you know all the ins and outs of filing bankruptcy. Below are a few of the common mistakes people make when they are filing bankruptcy. As you can see from reading them, one little misstep could lead to your bankruptcy being dismissed. So, make sure you dot all of you i's and cross all of your t's and you will come out of bankruptcy with a clean slate.\nNot Telling the Truth\n---------------------\nThe first step in the bankruptcy process is taking the means test, which is a series of financial questions used to determine if you have the capacity to pay your creditors. The majority of people who file for bankruptcy will qualify but those who don't, generally will have other options available to them. By leaving out assets or income on your means test just so you qualify, could result in getting your case dismissed down the road. Even worse, lying and being caught lying could get you banned from filing on those particular debts ever again.\nOmitting a Source of Income\n---------------------------\nYou might think that part-time job does not really count as income but in fact it does in eyes of the bankruptcy court. What you might think is an insignificant means of income, is still plain and simple — income — so you need to report it.\nAnd this goes for ALL household income. If you have a child, who still lives with you and you claim him or her as a dependent in your bankruptcy, and this child has a part-time job, you have to include his\/her income. Failure to do so will result in getting your case dismissed.\nLeaving Out Cars or Car Loans\n-----------------------------\nWhen you think of bankruptcy, the first thing that may come to mind is, \"I don't want to lose my car.\" If you have a car with a loan on it, you must list it as one of your liabilities. And, if you own it outright, you have to list it as an asset in your bankruptcy paperwork. Failure to do so, or transferring it to another family member right before you file for bankruptcy, is a sure fire way to lose your car.\nWhen it comes to the loan on your car, you have to notify the lender you have filed for bankruptcy. Usually, the lender will work some type of agreement with you so you can keep the car.\nLeaving Out Some Creditors\n--------------------------\nFace it, you can't hide from your creditors so don't leave any of them off of your bankruptcy filing. With everything now computerized, most credit card companies have centralized their information so they will know if you have filed for bankruptcy protection. It is better just to come clean and list them all than to try to hide one and get caught. Leaving out creditors may get your case dismissed.\nTransferring Assets Out of Your Name Prior to Filing Bankruptcy\n---------------------------------------------------------------\nThis is a big no-no and it is illegal. Transferring any assets for the purpose of protecting them from being taken is not the right way to go about protecting them. Talk to your bankruptcy attorney about how to legally protect assets that might otherwise be at risk.\nFailing to List all Potential or Pending Lawsuits You Have Against Anyone\n-------------------------------------------------------------------------\nThis is an area that is frequently overlooked by people filing for bankruptcy. If you are in the process of suing anyone for anything, that is considered an asset and must be listed as such in your bankruptcy paperwork. You may be able to continue with these cases, but the court-appointed bankruptcy trustee must know about any and all lawsuits or potential lawsuits.\nRunning Up Credit Card Balances Before Filing Bankruptcy\n--------------------------------------------------------\nMany potential filers say that they are going to use up all their available credit before filing for bankruptcy. This usually does not work for the filer. The creditor will review your credit card charges after receiving the bankruptcy notification. If the creditor believes you ran up your credit card balances before filing, it has the right to challenge your request to eliminate some or all of your balance. You could end up owing money on your credit cards after your bankruptcy is over.\nBankruptcy does not have to be a difficult procedure. As long as you adhere to the laws and regulations, your bankruptcy will go smoothly and quickly. We always recommend you talk to an attorney before filing bankruptcy. You need to understand all of your options and alternatives to bankruptcy before you file. END