Debt Consolidation and Credit Card Counseling

Bankruptcy is a complicated process; be sure you do it correctly

The process of filing for debt relief through bankruptcy courts has never been easy. But the passage of the Bankruptcy Abuse and Consumer Protection Act of 2005 has made it more complicated than ever. Tens of thousands of Americans rushed to file in late 2005 before the new law took effect. Now, after filings slowed to a trickle, the number of filings is starting to increase again. While filing for debt relief is a last resort act of those with financial problems, it is important that you do it correctly. A simple mistake could end up costing you money, assets, or even your case. The last thing you want is to have your case tossed out because you did something incorrectly.

Here are a few things that will always get you into trouble:

• Failing to hire an attorney - Legally, you can probably file without one, but why would you? Unless you are an experienced lawyer with bankruptcy cases in your past, you would probably do more harm than good by representing yourself. The money you spend hiring an attorney with debt relief experience will save you time and stress.
• Hiding or failing to disclose assets - A common practice among filers is to try to preserve assets, either by hiding them or by “forgetting” to mention that they exist. Transferring property to someone else’s name or conveniently failing to mention the existence of your vacation home will get you into trouble. Forgotten, neglected, or transferred assets always seem to be found. Then you need to explain how they got that way. And worse - you may lose the benefit of the doubt should other issues arise later.
• Failing to file documents on time - This, along with failing to show up for your hearing, will always get you into trouble. The documentation, filed completely and correctly, is even more important than ever. Under the new law, your attorney is legally liable for the accuracy of the information contained in your documents. Make sure they are correct, complete, and filed in a timely manner. You want the court to be on your side; failing to submit your paperwork properly won’t help in that regard.
• Spending - If you spend money carelessly or on nonessentials in the months leading up to your filing, you could be viewed as someone who is financially irresponsible. You don’t want that; you want some sympathy. Don’t be taking expensive vacations or buying expensive consumer goods in the months before you file.

Filing for debt relief is not something that anyone should be excited about. But even with the new law, most people are being permitted to have their debts eliminated so that they can get a fresh start. That’s what you want, so the best way to do that is to be professional, timely, sufficiently represented, and honest. If you can do that, the court will be much more likely to see things your way. If not, then you may be looking at those debts for a long time.

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