While it’s never an easy decision, bankruptcy is sometimes the best option. For those who experience mounting medical bills or other debt, bankruptcy can help lift you out of the hole you’re in and help you get a fresh start.
Types of Bankruptcy
There are two different types of bankruptcies that you can file as an individual in the U.S. These include Chapter 7 and Chapter 13 bankruptcies.
Chapter 7 bankruptcy is the one that will discharge the majority of your debt so you can clean your slate and start over with rebuilding your finances. For this reason, it is often most desired. However, sometimes an individual may not qualify for Chapter 7 bankruptcy and must instead file for Chapter 13 bankruptcy. This occurs when your disposable income is not low enough to pass the means test.
Chapter 13 bankruptcy helps to reorganize your debt. Under Chapter 13 bankruptcy you work with your creditors in order to establish a new payment plan that works best for you.
But while Chapter 7 bankruptcy and Chapter 13 bankruptcy certainly vary, there are still things that you shouldn’t do when filing for either type in Texas. Here are 3 things you want to avoid before filing.
1. Lying or Omitting Information from Your Attorney
It’s understandable that there are certain things that you don’t want to share with others. For instance, you may believe that it’s in your best interest to hide your assets or to leave some of them out when you provide your list of assets to the bankruptcy court. However, this is a big no-no. If the court finds that you have lied or omitted anything of substance, not only can your case be rejected by the court, but you can also be charged with bankruptcy fraud and risk jail time and monetary fines.
2. Going on a Shopping Spree After Beginning the Bankruptcy Process
When you think about having all of your debt discharged, it makes you want to go buy as much as you can first. However, while most (if not all) of your debt is discharged under Chapter 7 bankruptcy, it’s highly looked down on to incur any new debt within 90 days of filing. This money will likely not be dischargeable and you’ll still have to pay it. In other words, you’ll be starting out on the wrong foot once again.
3. Giving Your Friends or Family Property
You may think it’s a great idea to move your money to friends and family prior to filing for bankruptcy. However, this is pretty much the same thing as lying about your assets. Again, not only can this put your case at stake, but you can also be charged with a crime and have to face the consequences.
Toronjo & Prosser Law Helps Those Who Are Dealing with Bankruptcy
It’s undoubtedly stressful to realize that you don’t have enough money, and even more stressful when you realize that filing for bankruptcy may be your best option. That’s why it’s so important to consult with a knowledgeable and experienced Dallas bankruptcy attorney. At Toronjo & Prosser, our qualified Texas Bankruptcy Attorneys can help you to navigate the process. To learn more or to schedule a free consultation contact us online or call us today!