Honesty is the Best Policy: Mistakes that Could Cost You in Bankruptcy Court
If you find yourself in over your head financially and there just seems to be no other way out, bankruptcy might be the solution to your financial woes. Depending on what type of bankruptcy you file, you can get rid of all or most of your debt or at least renegotiate that debt into a more suitable payment plan. Either way, bankruptcy can rid you of a lot of financial burden. However, before you go through with a bankruptcy filing, you need to know that bankruptcy is intended for the honest creditor. If you plan to lie or try to get around something by a simple omission of the facts, it could cost you. Your case could be denied, and if you are caught committing bankruptcy fraud which happens to be a felony, punishable by some time spent in jail.
Your Assets
Don’t get rid of assets that would be protected by bankruptcy laws. Don’t try to hide assets that are not protected, and do not get rid of any for less than they are worth. You will only lose; often more ways then one. If you get rid of assets that are protected, well, you no longer have them. Period. Your loss, and you will just have to live with it. However, trying to hide an asset, especially by getting rid of it for less than it is worth, just so you do not have it at the time of bankruptcy, is not a smart move. You have to disclose your assets and the transfer thereof to the court.
Laying it on Thick
Your about to file bankruptcy, so you think, why not? One last joyride while I still have the credit to spend. Again, not a very smart move. Just because you are planning to file bankruptcy does not mean you can go out and rack up all the debt you want, under the impression that the court will relieve you of it. Increased activity or suspicious activity, followed by a bankruptcy filing will be a red flag for the credit lender. They in turn will dispute your bankruptcy claim, reporting your actions to the court. If the court finds in their favor, you might wind up in hot water with a lot of debt to pay.
Omissions
Whatever lies in your financial history, you need to first disclose it to your attorney and work out a plausible solution and then tell it to the court. No matter how shameful or dumb it might be, you have to be honest. The court requires it, if you want your attorney to help you to the best of his or her potential, you have to be open and honest. He or she can not work with you on things they do not know about.
Don’t try to fool the bankruptcy court. Odds are, they will find out one way or another. Then, you will be the one really in the hurt. You’ll still have all the debt, plus a lot to answer for, one way or another.
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