If you're headed into bankruptcy in 2006 you're already
in a bit of a mess. The worst thing you can do now is to compound
your problems. Of course there are many tried and true ways to do
just that, but if you've decided the bankruptcy is the best solution
to your problems, avoid committing one of these blunders:
1. Failing to disclose previous bankruptcy. This has a way of coming
back to bite you especially because it's so easy for the court to
discover all the details of your previous filing.
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2. Miscalculating income and expenses. Be as specific as possible
when going through your expenses with your attorney. The system
works best when petitioners answer all questions honestly and play
the bankruptcy game by the rules.
3. Failing to disclose an asset. Some people think, "I don't
want to lose my car so I better not say anything about it."
Instead, they should be thinking, "I don't want to lose my
car so I better tell my attorney about it because my attorney will
know best how to protect it." They should also be thinking,
"If I don't want my bankruptcy petition refused, I probably
shouldn't lie to my attorney or to the court." Make sure that
your attorney knows about ALL your assets.
4. Attempting to use a paralegal. While there are many fine paralegals,
it is not their job to give sound legal advice. Under the new bankruptcy
laws if you have valuable assets, you need an attorney.
5. Failing to submit documents in timely manner. Do not bring attention
to your case because you fail to adhere to the trustee requests
-- get requested documents to the court immediately.
6. Missing your hearing. If you miss your hearing, you might get
a judgment against you, and certainly the court will be far less
disposed toward you in the future.
7. Trying to hide assets. Do not transfer a car or house out of
your name and then file bankruptcy. The likelihood is that you will
lose the asset and get the new owner in trouble. Hiding assets tends
to expose them.
8. Advancing cash to yourself. Cash advances at least three months
before you file are even more likely to bring creditor challenges
to your bankruptcy.
9. Abusing credit cards. Heavy use of your cards three months before
you file carries a "presumption of abuse." You will likely
end up returning some or all of the money from these charges.
10. Lying. In general, honesty is the best policy. But if you're
asked by your spouse, "Do I look fat in these jeans?"
do what you think is best.
Justin Harelik is a practicing bankruptcy lawyer
in the Los Angeles office of Price Law Group. To ask a question
of the Bankruptcy Adviser go to the "Ask
the Experts" page, and select "bankruptcy" as
Bankrate experts' advice
Repeating your money errors of the past
is a sure way to personal finance wreck and ruin.
Here, Bankrate columnists identify their picks
as the worst mistakes you can make when it comes to your finances in the areas
of real estate, debt, taxes, bankruptcy and personal finance, along with tips
on how to avoid them next year.