What Are The Main Reasons For Denial And Getting Into Trouble With The Court When Declaring Bankruptcy?

Law Blog

Many people who have trouble with unpaid debts believe that declaring bankruptcy is the surefire solution to the problem. However, this option might not solve your financial issues and could worsen your situation. Therefore, if you're planning to file for bankruptcy, talk to an attorney to know whether filing is the right answer to your problem. If it is, they will take you through the filing process to ensure you understand your obligations. In addition, your lawyer will want you to be aware of the following errors that could lead to a denial or get you into trouble with the court.

Providing Incorrect Information

Some people believe that bankruptcy is an official pardon from paying accumulated debts. This is why they lie about their financial situation to show they cannot pay back what they owe. In most cases, applicants hide assets or transfer ownership to their close friends or relatives before declaring bankruptcy. You should know that this is a costly mistake that can seriously impact your application. Furthermore, it might lead to a direct denial and even get you into trouble with the court. This is especially the case if the information you provide seems like you want to lie about your financial situation. For these reasons, your attorney will want you to provide accurate information about what you own and earn. This way, you will have a better chance of qualifying for bankruptcy and avoid worsening your situation.

Incurring New Debts

As you prepare to file bankruptcy, incurring new debt might also make you ineligible for bankruptcy. This is because the court might assume you are unwilling to repay what you owe. Therefore, they might not be willing to restructure your debts. To avoid this mistake, your legal advisor will ask you to stop borrowing money as you prepare to declare bankruptcy.

Handling the Proceedings Yourself

Many people who handle bankruptcy proceedings on their own often overlook some crucial details or omit essential information when preparing their applications. This leads to denied applications, which exposes them to the danger of losing their assets to debtors. Given this, you should consider working with a lawyer when filing for bankruptcy. They will ensure that you comply will all the necessary requirements regarding legal documentation. In addition, they will assist you in filling out the paperwork to ensure that you provide all the necessary information.

If you don't want your bankruptcy application to fail, hire a bankruptcy attorney to help you through the process. They will ensure that you avoid the mistakes above and others that might lead to disqualification. Reach out to a local law firm, such as Martinez Law Firm, to learn more.


11 January 2023

injured at work? what do you do now?

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