Finding oneself in a pile of debts is definitely an uneventful scenario and filing for bankruptcy stands as the only viable option for this. The filing process can help to discharge some or all of the debts and get manageable payment schedules for the others. You can also take care that you are careful of building a future that is devoid of these financial mistakes.
If you are in Texas, there are some key guidelines to be cautious about when you are filing for bankruptcy. Take a look at them now!
- Do not spend your retirement funds–In order to get yourself out of the bankruptcy situation, you may be seeking for several ways for paying off your debts and cover the day to day expenses. Withdrawing and using retirement funds ahead of your retirement age may incur heavy tax penalties and is not advised. You will be able to save your retirement funds when you file for bankruptcy so that your future is secured
- Do not mislead the court with incorrect information – When you are filing for bankruptcy, you are expected to furnish a lot of your financial information. Providing any inaccurate data can put you in a position of facing criminal and civil penalties
- Don’t evade the paying of income taxes – Owing dues on the income tax can lead you to scenarios of the debts involving income tax not being discharged. Hence ensure that you rightfully pay your taxes or report the past dues diligently when you file for bankruptcy
- Do not accumulate newer debts –Credit offers for new credit cards or loans can tempt you when the finances are very difficult. Newer debts that are obtained within 12 weeks before filing of a bankruptcy can be treated as fraudulent and can have a negative impact on your filing. Creditors tend to claim that new debts were obtained with no intentions of repaying them. Even if you are charging an item on your credit card, let it be related to basic amenities or for living needs. Cash advances and spending on luxury items can also lead to a lot of scrutinies
- Do not transfer or move your assets – When you see yourself in a position to file bankruptcy, do not transfer or sell your assets to someone else. This is treated as a scenario of hiding personal assets in lieu of filing of bankruptcy. Remember that these assets may be utilized to repay off debts and hence if your real intention is in keeping them, then consult a bankruptcy attorney such as Recovery Law Group
- Do not repay any debts selectively –In case you are considering clearing off certain debts ahead of your filing of bankruptcy, such as paying off personal favor done by a friend or clearing off the bills of your family physician, then it is termed as a preferential payment. The bankruptcy court determines the legal priority for repayment and if at all the settlement to creditors have been made, the bank requests the funds to be returned back from the creditors
- Filing for bankruptcy is still fair –Avoiding conditions of filing for bankruptcy is not advised especially when debt situations take complete control of your life. Instead of selling off your assets and using up all of your savings, you can consult a bankruptcy attorney from well-renowned firms to handle your financial situation.