Facing financial uncertainty can riddle you with stress and leave you feeling so overwhelmed that you can barely function. Fortunately, the personal bankruptcy process might lift the burden from your shoulders and give you the fresh financial start that you need. But the process has to be carefully navigated, otherwise you could be denied the relief that you want. That’s why it’s important that you’re aware of some commonly made mistakes that could jeopardize your ability to secure the outcome that you envision for yourself.
There are a lot of missteps that can be made during a personal bankruptcy case. This includes each of the following:
- Using retirement funds to try to pay down debt before seeking bankruptcy, since these assets would be exempt from the bankruptcy process.
- Failing to correctly and completely fill out bankruptcy paperwork, which could lead to denied discharge.
- Taking on new debt right before filing for bankruptcy, as creditors will likely challenge the discharge of these debts and may be successful in doing so.
- Selling assets for less than they’re worth shortly before filing for bankruptcy.
- Paying back money borrowed from family or friends prior to filing for bankruptcy.
- Failing to identify all creditors and sources of income.
- Neglecting to comply with mandatory credit counseling.
Don’t be your own worst enemy in your bankruptcy case
There are several other mistakes that can be made when pursuing personal bankruptcy. You don’t want to make an error that could cost you the opportunity to clear debt and secure a fresh financial start. So, be careful as you navigate the bankruptcy process so that you can protect your interests throughout the process.