A lot of people end up sabotaging their bankruptcy case due of lack of proper knowledge. This can seriously hurt your chances of discharging debts through this debt relief process. Read the following tips to avoid the typical mistakes which debtors make while in bankruptcy:
- It is mandatory to take a credit counseling session before filing bankruptcy. Many people are unaware of this and some just ignore it. However, it can prove to be a costly mistake and lead to dismissal of your case.
- Providing incorrect information on bankruptcy forms can be fatal. A number of debtors do not mention some debts or some particular creditors to keep them out of the bankruptcy case. This is perceived by the bankruptcy court as deliberate manipulation and the debtor might be charged with bankruptcy fraud. Eventually, the bankruptcy case might get dismissed and in worse cases the debtor will be fined or can face imprisonment.
- Failing to offer your income tax return to the trustee is a mistake. Your creditors have right over the refund if you get it in the year following the bankruptcy.
- If the debtor endeavors to conceal his assets while in bankruptcy then he can face legal consequences. He won’t receive any discharge and might be charged with bankruptcy fraud. In case, the court finds out in the post-bankruptcy period that the debtor did not disclose some of his assets during the process then the latter will be forced to pay back his debt to the creditors.
- It is a big mistake when a debtor fails to turn up at the 341 meeting (meeting of the creditors). If you do not produce necessary documents required by the court then it can be a problem too. Both the mentioned mistakes can lead to dismissal of the case.
- If you stop making payments or reduce the payment amount without sufficient reason in a chapter 13 bankruptcy then it you can be in trouble. If you are facing an emergency like job loss or medical problem then the court might consider your situation. Other your case will be simply dismissed.