It might be quite tempting to try to complete your bankruptcy papers on your own if you are considering filing for bankruptcy. After all, the last thing you want to do when you’re already drowning in debt is add to it.
The reality remains, however, that engaging a bankruptcy attorney is a wise investment. Aside from ensuring that you select the appropriate bankruptcy, obtain maximum debt relief, and have your petition granted as promptly as possible, engaging an attorney can also prevent you from being accused of bankruptcy fraud owing to a misunderstanding of the law.
Here are four frequent bankruptcy filing errors that might result in a fraud charge. If you have questions or are ready to request a free consultation, contact The Law Offices of Paul Y. Lee at 951-755-1000.
Make sure you are not including disputed debts
Before filing for bankruptcy, it’s not unusual for people to have one or more debts sent to collectors. It is possible that the amounts or even the existence of the debts pursued by the collection agency will be contested. When filing for bankruptcy, keep in mind that you must reveal ALL obligations that any creditor believes you owe them. You can mark a debt as “disputed” on your bankruptcy petition if you don’t feel you owe it as stated by the creditor, but you must not exclude it.
Preference transfers are a no-no
The court decides how your numerous creditors are paid in a bankruptcy. This is not a decision you get to make. If you try to repay a creditor before filing for bankruptcy, this will be interpreted as providing that creditor unjust preferential treatment. The bankruptcy court has the authority to reclaim the money and divide it among your creditors.
Payments or transfers of assets made to friends or family too close to your filing date may also be refunded by the court. Unfortunately, many people are unaware of the limits on transfers made in the 12 months leading prior to bankruptcy, and as a result, they make judgments that might be considered fraudulent.
You must make all assets public
The most typical sort of bankruptcy fraud is failing to report all of your cash, investments, property, and assets. While most of the time this is done on purpose, someone may unwittingly commit fraud by forgetting about a retirement account or an old savings account.
Do not forget to mention any assets you expect to receive as a result of your filing
One last mistake that might lead to charges of bankruptcy fraud is failing to declare any assets that you anticipate obtaining shortly after your petition. A court settlement, an inheritance, or a pension are all examples.
What should I do if I err on my bankruptcy petition?
If you make a few honest mistakes on your bankruptcy petition, you will almost certainly be allowed to amend them without incurring any penalties. All you have to do now is persuade the bankruptcy trustee that you didn’t intend to file an incorrect or incomplete petition. However, if you are formally charged with fraud, you should engage a bankruptcy attorney to assist you fix your mistakes since you might face jail time and large fines. Contact The Law Offices of Paul Y. Lee at 951-755-1000 for help.