Chapter 13 bankruptcy is an attractive option for businesses and individuals with assets they can't afford to lose. However, retaining standing under chapter 13 can be difficult. With enough mistakes, your case could be moved to chapter 7 status, meaning some of your assets would be up for seizure. If you want to keep your property protected during bankruptcy, it's important to avoid common mistakes when filing and paying back your debts.
Don't Tackle The Paperwork Alone
Filing for chapter 13 bankruptcy involves an almost frightening amount of paperwork. In fact, the application itself, which everyone who files must fill out, can go on for over 40 pages. Before you can even seek bankruptcy from the courts, you first have to enter in huge amounts of information about your current and past financial status, income, expenses, creditors, payments, assets, etc.
When you consider the sea of information required, it's easy to see why mistakes are often made at this stage in the filing. However, despite the ease with which you could leave out a creditor or forget an asset, the fallout from such a misstep will not be easy to deal with. In some cases, it will simply delay your application. In others, you could be required to fill out further forms and pay fees. Beyond that, there is even the possibility of being charged with a crime for entering in wrong information.
Fortunately, a good lawyer can act as your fail-safe when you deal with these forms. You can ask questions about each page and double-check with your attorney that the information is correct. It may take longer to fill everything out with legal counsel walking you through it, but in the end it's the best way to ensure you don't make any mistakes and hurt or even possibly destroy your own case.
Keep Up With Your Schedule
Keeping up with a bankruptcy is all about staying on schedule. For chapter 13 proceedings to complete, for example, you have to undergo government sponsored credit counseling classes within a specified amount of time. Failing to begin the classes on time may result in not having the certificate needed to continue with your case, which can delay it and potentially even lead to a dismissal.
You must also remember that your first payments of the bankruptcy are due within 30 days of filing, and mortgage payments are due on the first typical date after filing. Missing your first payment can not only hurt your credit, but also hurt your standing with the courts. If you miss too many payments or pay late too often, your case could be downgraded to a chapter 7 bankruptcy, and you could lose your assets.
Get In Touch If Things Go Wrong
After already seeking help from the courts, it may be tempting to try to handle new debts or emergencies on your own. However, if you don't contact your lawyer, isolating yourself may usher in new debts and allow your creditors to demand the sale of your assets.
Depending on the cause of new debts or an inability to pay, your attorney may be able to pause the bankruptcy proceedings or reduce payments until you're able to pay again. If you lose your job or get injured, for example, you may be able to put those payments on hold while you recuperate and regain your ability to pay. Without requesting your lawyer notify the courts of your status, every missed and late payment will be recorded as a strike against you.
Chapter 13 bankruptcy provides an excellent avenue for those in debt to climb back out of the hole. However, certain mistakes can put your assets at risk. If you're concerned about filing for chapter 13 or you need help making your payments, contact your lawyer as soon as possible. It might save you a ton of trouble in the future.
Share26 January 2015
My name is Noni. When I was in college, I was hit by a car while crossing the street. My life was never in danger, but I did break a few bones and had a lot of huge medical bills. I was hoping I wouldn't have to get involved with an attorney, but unfortunately, it came down to that. I used a family friend who is an accident attorney to get some compensation. A few years later, I was hit while riding my bike and had to go through the same process. I suppose I'm lucky to be alive. And it's thanks to accident attorneys that I have been able to put my life back together. I started this blog as a way to let others know just how much lawyers can help you in certain situations.