Filing for bankruptcy may be the hardest decision you'll ever make. You've worked hard to get where you are in life. Unfortunately, unforeseen circumstances such as divorce, unemployment or life-threatening medical conditions can destroy your finances in a heartbeat. If you're faced with mounting debt and you've tried everything else –including debt consolidation and family assistance – bankruptcy may be your only option. However, there are some things you can do that will jeopardize your chances of having your debts discharged. Here are four things you should never do while you're going through bankruptcy.
Apply For New Lines of Credit
If you've already filed for bankruptcy, you should avoid applying for new lines of credit. You'll need to list all of your creditors on your bankruptcy forms. The judge may question why you applied for new credit when you knew that you didn't have the financial ability to pay the bills. In addition, once those creditors find out that you've filed for bankruptcy protection, they can go to court and request an exemption – which would require you to repay the debt if it was approved. To avoid problems, don't apply for new credit until after your bankruptcy has been discharged.
Give Away Personal Property
If you're like most people who file for bankruptcy, you want to keep as much of your personal property as possible. However, giving your property to family members is one of the biggest mistakes you can make. If you're caught giving away your personal property prior to filing for bankruptcy, it can jeopardize your case. Here are a few of the things that can happen if you get caught hiding or giving away your property.
- Debts won't be discharged
- Previously obtained discharge can be revoked
- You could face criminal charges
Use Your Retirement Funds
Your retirement accounts are exempt from bankruptcy seizures. That means that money in your retirement funds cannot be used to satisfy debts that are being discharged through bankruptcy – unless you dip into the accounts. If you have a retirement fund, don't dip into it to repay debts. As soon as you use any of the proceeds from your retirement accounts, your bankruptcy trustee can use those assets to pay down your debts. Protect your retirement. Resist the temptation to use those funds while your bankruptcy case is still open.
Move Out of the Family Home
If you own your home, you may be worried that you'll automatically lose it once you file for bankruptcy. Luckily, that isn't always the case. You may be able to keep your home, even if it's in foreclosure. The important thing to remember is that you must continue living in the home. As soon as you move out, you forfeit your right to retain ownership. If you're about to file for bankruptcy, don't move out of your home
If bankruptcy is the only option you have to getting out from under your debt, don't make mistakes that could jeopardize your case. The information provided above will help you avoid costly mistakes. Before you file for bankruptcy, be sure to speak to an attorney at http://timgeorgelaw.com. They can help you navigate the bankruptcy laws so you can regain your financial freedom.