Financial health is very important for the overall wellbeing of a person. Every debtor's first priority should be to maintain balanced finance without the need of any debt restructuring plan or the need for declaring bankruptcy. However, things happen in life, both the positive and the negative. Most people file bankruptcy because of the life-changing event such as divorce, loss of a job, and illness. Whatever your reason may be and every other option does not seem to work for you then bankruptcy may be the tool you need in order to restore your financial health. In this article, I will share with you 8 crucial mistakes to avoid before filing for bankruptcy.
1) Do not cash-in your retirement account.
Creditors are not eligible to force you to cash in your retirement account while filing for bankruptcy. Hold that money for your retirement.
2) Do not settle debt with your creditors
You may cause yourself to pay an additional amount of money if you settle your debt before filing bankruptcy that you can save when you file for bankruptcy. The better option is to stick to your original plan.
3) Do not make big purchases
Do not make large purchases on your credit card within the 90 days of filing bankruptcy because you may find yourself still responsible for those charges and you would have to pay them anyway.
4) Let your attorney know about your text return.
Inform your attorney if you are expecting a text return. That money could be used to pay off your debt without the need of filing for bankruptcy.
5) Do not repay any family loan prior to bankruptcy.
If you repay family or friend’s loans shortly before filing for bankruptcy instead of paying your creditors then it can be risky for your situation. The other attorney can file a lawsuit against you and your family intentionally.
6 Do not transfer any property out of your name.
If you transfer your property out of your name. The court may see this as an action to intentionally frustrate or hinder your creditors.
7)Do not ignore a pending lawsuit
Confirm your attorney whether you need to respond to a pending lawsuit or not in order to protect your rights and your property. Lawsuits continue to move forward until you file bankruptcy.
8)Do not withhold information from your attorney
You need to tell everything to your attorney
Tell your attorney everything so you are not exposing yourself to major risks. Including lawsuits, assets, dismissal of your case, and any criminal charges. your interest can only be protected with complete information.
Configure all of the options and find a suitable solution. If you believe that bankruptcy is the best choice, then go for it but never forget to take professional advice and be prepared for every aspect of your situation.
Conclusion
There are many possibilities that can lead to a troubled finance condition. As a debtor, your priority should be to be responsible towards your debt but if somehow you are facing troubles about it then take action as soon as possible in form of debt consolidation or debt restructuring such as IVA debt restructuring. Restructuring your debt can provide you an easy way out of your debt problems without the need of declaring bankruptcy.
