If you have a large amount of debt that you cannot feasibly pay off yourself, then it may be time to start looking at bankruptcy options. Specifically, chapter 7 bankruptcy is the most common type of bankruptcy filed across the United States. If you are approved for chapter 7 bankruptcy, this means that you allow for some of your assets to be sold off and the proceeds used to pay off as much of your debt as possible. In many cases, any remaining debt may be forgiven.
If you're thinking about filing for chapter 7 bankruptcy, there are a few common mistakes you'll want to avoid.
1. Being Dishonest About Your Income/Debt
For starters, when it comes to filling out your chapter 7 application, keep in mind that you will be asked some very detailed questions about your current level of debt and your current income. The biggest mistake you can make is being dishonest about any of this debt/income or even accidentally misreporting it.
2. Assuming All Your Debt Will Be Discharged
Another common mistake many people make when they file for chapter 7 bankruptcy is that they assume having their application approved means that all of their current debt will be discharged when all is said and done. While it's true that this is sometimes the case and the banks will try to work with you to reach a full settlement solution, there may be instances where you are still responsible for some of the debt leftover after your assets are sold and balances are paid.
3. Not Appealing an Initial Denial
It is not uncommon for those who file for chapter 7 to have their applications initially denied; this is often due to a mistake in filling out the application that can be easily fixed. Don't get discouraged if you're denied with your first attempt; find out the reasoning and see if there is anything you can do to rectify the error.
4. Filing Without Help From an Attorney
Finally, don't try to go through the process of filing for bankruptcy without the help of an experienced bankruptcy attorney. These professionals can help you navigate the complex filing process and will advocate for you as much as possible; they may even be able to negotiate with your creditors to reduce your total amount owed when all is said and done, so it's definitely worth having a legal team on your side during the process.
For more information, contact a law office like Haven Law Group, P.C.