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Three frequent bankruptcy mistakes to avoid

Three frequent bankruptcy mistakes to avoid
"""Too many consumers wind up making mistakes during the bankruptcy process. Some attempt to cheat the system and operate outside of the rules, while others simply do not heed their attorney's counsel or observe the rules when initiating the process. Others make the error of placing their assets at risk to cover unsecured debts, only to end up filing for bankruptcy in the end.

Here are three common errors to avoid when filing for bankruptcy:

1. attempting to conceal assets from a judge or trustee.

In Chapter 7 bankruptcy, the trustee will attempt to recover as much as possible for the benefit of the creditors. State or federal law protects certain assets, including your primary residence and a modest vehicle. The specifics differ from state to state, and some states have limits based on the amount you owe and the value of your home.

Other assets are not exempt, however. You must accurately identify all of your assets on your bankruptcy paperwork. You do not want a federal judge to become enraged because you deceived about your assets to avoid paying off some of your debt.

2. Omitting some creditors from the list

If you want all of your debts to be discharged in Chapter 7 bankruptcy (or as many as the law allows), you must list each creditor with the precise amount owed and address. You can request an amendment to your case if you forget any creditors, but you don't want to risk any chances. After all, the purpose of this entire procedure is to eliminate your debt, so you must ensure that you maximize its benefits.

Avoiding bankruptcy by using a home equity loan

This is a prevalent error that occurs prior to the legal proceedings, not during them. Bill collectors may exert pressure and convince you that you must pay your bills regardless. In the meantime, credit counselors employed by the credit industry may persuade you that home equity loans are preferable to bankruptcy.

You must exercise extreme caution when considering this option. Remember that your unsecured debt is unsecured -- it is not secured by any collateral. Why would you place your home at risk to pay these credit card bills? You could have protected your property while eliminating your debt through bankruptcy.""

" - https://www.affordablecebu.com/

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"Three frequent bankruptcy mistakes to avoid" was written by Mary under the Finance / Wealth category. It has been read 86 times and generated 0 comments. The article was created on and updated on 02 June 2023.
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