Knowing What Not To Do Is Also Crucial Before Filing Chapter 7 Bankruptcy Through A Bankruptcy Lawyer - San Diego

For persons deep in debt and not having a good income source to repay it, filing a bankruptcy petition could be the only way out. It could appear to be an easy way to get out of debt in San Diego, but one needs to answer a few questions before taking the plunge. One must reflect on whether they are prepared with all requirements to file a Chapter 7 Bankruptcy or consider holding it for the future. You must be prudent about some relevant issues mentioned below before moving forward with the bankruptcy petition.

Think Well Before You Rush Into The Bankruptcy

Chapter 7 Bankruptcy is an excellent avenue available to you for getting a discharge. However, you should know about the limitations. You can receive a Chapter 7 debt discharge

1. Once in eight years,
2. Or up to six years after filing Chapter 13 Bankruptcy, which is also a prominent one among San Diego county Bankruptcies.

The waiting period can be crucial, as you could find yourself facing a more severe financial crunch. There can be a job loss, an eviction, car repossession, a foreclosure, or even a severe illness that could bring in more debt than you have at present.

Rushing Into A Chapter 7 Bankruptcy Leaves You With Fewer Options.

Before a debtor gets ready to file Chapter 7 Bankruptcy in San Diego, the following points must be considered seriously.

1. Once you file Chapter 7, you cannot do so again in the cooling period. Thus, the creditor can move ahead with a wage garnishment or initiate a mortgage foreclosure.
2. You can move a Chapter 13 petition, but a Chapter 7 vs. Chapter 13 comparison shows that you should have the income to qualify for it. You might be required to pay a substantial portion of the discretionary income as repayment.

When To File Chapter 7 Bankruptcy?

Though the above points are essential, sometimes delaying too much to file Chapter 7 Bankruptcy can backfire. It could be best if you make it early in situations like the ones listed below.

1. If you are staring at a wage garnishment, the sooner you file Chapter 7 Bankruptcy, the better. You could have more money on hand to pay your bills.
2. Filing a Chapter 7 bankruptcy is the right thing when the creditor has a lawsuit against you. If the case goes against you in judgment, you might not be able to get a discharge. The creditor will have the lien rights to garnish your wages, attach bank accounts, foreclose a mortgage, or repossess your car. Filing for a Chapter 7 Bankruptcy petition will stop the pending lawsuit and wipe off the debt.

What To Stay Away From With Chapter 7 Bankruptcy

Here are some things a debtor should avoid when deciding to file Chapter 7 Bankruptcy. You should contact your bankruptcy lawyer in San Diego (or must get one if you do not already have one) and seek further information and valuable guidance regarding the points mentioned.

Never Drain Your Retirement Account

Chapter 7 Bankruptcy protects most of your retirement accounts. Many people drain out their retirement funds to pay off debt, while your bankruptcy petition could wipe it off. Consult your bankruptcy attorney before taking such drastic steps.

Never Provide Incorrect, Inaccurate, Or False Information

It would be best if you were transparent in your dealings when filing Chapter 7 Bankruptcy. You have to provide details of your income, assets, and obligations when filing Chapter 7 Bankruptcy. Misrepresenting information is a crime. The punishment could extend to a fine of up to $250,000 or up to twenty years in prison. Your legal aid in San Diego is the perfect person to advise you concerning such information.

Do Not Incur New Debt

Accumulating new debt during the 70 to 90 days before filing bankruptcy proceedings can put you in trouble unless the debt is for satisfying the necessities of life. The creditor can dispute the discharge by arguing that you availed of the loan with a fraudulent intention of not repaying it. Consult your bankruptcy lawyer and learn more about presumptive frauds.

Do Not Move Your Assets

People tend to hide their assets or transfer it to their dear ones before filing the bankruptcy petition. It is not advisable because you might be denied the discharge and could end up paying criminal penalties.

You can argue that you sold your property before filing bankruptcy to fulfill your necessities, like paying rent, food, or medicines. However, you should provide sufficient documentation to prove the claim.

Do Not Repay Loans Selectively

Consult your bankruptcy lawyer to know more about preferential transfers. Repaying your friends, relatives, or even other creditors within 90 days of filing bankruptcy is a preferential transfer. The other creditors can get such preferential transfers undone.

Do Not File For Bankruptcy When You Are About To Receive Substantial Assets

You should not proceed with filing for bankruptcy when you are expecting receipt of substantial assets. It could be an inheritance (within one year), an income tax refund, or a lawsuit settlement.

Do Not Forget To File Your Income Tax Returns

If one is not required to file income tax returns, it can be ignored. However, if one is liable to pay taxes, one has to clear it as not paying tax for two years before filing bankruptcy could create problems.

The tax returns indicate current and past earnings. It also shows your asset holdings and your capability of satisfying potential priority tax claims. The bankruptcy trustee or the IRS cannot determine your tax obligations and proceed further without a tax assessment.

To avoid errors while filing bankruptcy petitions, one has to consult experts in the field. Apart from taking advice from family and friends, one must also think, “I must consult an experienced bankruptcy attorney near me.” A competent bankruptcy lawyer San Diego can provide quality advice. Your Chapter 7 Bankruptcy could get your debts discharged, but only if you follow the right procedures. Committing silly mistakes can only land you in more trouble.