Filing for bankruptcy can really help people who are dealing with large amounts of debt. It’s a chance for people to start over when things simply become overwhelming for them. Unfortunately, some people make costly mistakes before they file for bankruptcy protection. When preparing to file for bankruptcy, there are certain things that shouldn’t be done. Those who are unfamiliar with bankruptcy might not know what these things are unless they speak with a bankruptcy professional. This is why people should never go about filing for bankruptcy alone.
Whether it’s or some other qualified bankruptcy professional, help with bankruptcy isn’t hard to find. When dealing with the paperwork involved with bankruptcy, false or inaccurate information should never be provided. Accuracy is a must if the process is to be completed properly. The paperwork must include information about debts, assets, expenses, income, and all relevant financial history. If the information isn’t accurate or is dishonest, perjury charges may be filed. Failing to disclose assets may lead to the assets being forfeited in the future once they are discovered. Being honest about assets may allow a person to keep them if favorable terms can be worked out.
Another mistake some people make when preparing to file for bankruptcy is failing to file income tax returns. A person who is filing for bankruptcy must have completed income tax returns for the previous two years. Even if a person hasn’t had any taxable income during those two years, income tax returns must still be filed in order for the bankruptcy paperwork to be filed. Tax debts are considered priorities, so any tax debts must be known before the process can be completed. It’s impossible for tax agencies to know if any tax debt exists if there aren’t any tax returns on file.
New debt must also be avoided when bankruptcy is about to be filed. New creditors may object to a bankruptcy filing. This usually happens if debts are less than 90 days old. A creditor could say that a person was trying to commit fraud by taking out a debt that they had no intention of making good on.
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