Filing for bankruptcy may seem daunting and complicated, but with the right assistance and advice during the filing and discharging process, bankruptcy may be the best thing that has happened to you financially in a long time. U.S. Bankruptcy Courts don’t exist to belittle you, shame you, or leave you out to dry during the filing process. However, there are some occasions that may make it seem that way if you forego the expert legal help our attorneys at Behm Law Group, Ltd. can provide when filing for bankruptcy in Mankato MN.
There are several common, yet crucial, mistakes that debtors can make when filing for bankruptcy. Without legal assistance, you could be subject to making mistakes concerning these aspects of your financial situation during the filing process:
Settling Debt: If you have begun the filing process, you should avoid paying your unsecured creditors (creditors that do not have collateral) such as credit cards, medical debts and other debts that you do not wish to retain. These debts will be discharged in the bankruptcy. Continuing to pay them will neither improve your credit standing following the bankruptcy nor incentivize creditors to lend you credit. Paying on these debts is like “throwing good money after bad”. It will do absolutely nothing for you. Of course, you should continue to pay on secured debts (creditors that do have collateral), such as mortgage lenders and vehicle lenders, that you want to retain.
Retirement Funds: Because your creditors legally cannot touch your retirement account, you should not cash in your funds until the process is complete. You should never use your retirement money to “settle” your debts. By doing so, you are essentially wasting a financial “nest egg” that you have worked hard to establish that you can fully protect in bankruptcy.
Family Loans: Avoid paying off family loans or helping family and friends financially during or directly before the filing process. Your creditors and the bankruptcy trustee administering your bankruptcy case may bring a lawsuit against your family and friends to recover the money you paid them.
Property: Hold all your current property in your name during the bankruptcy process. DO NOT transfer property out of your name. If you do transfer assets out of your name, you will most assuredly lose the property you transferred.
Lawsuits: Because pending lawsuits or lawsuits against you will continue until your bankruptcy is filed, you should not ignore these suits. Our attorneys can help advise you on lawsuits and determine whether or not you should respond before a bankruptcy is filed.
Purchases: Making large purchases on your credit cards or cash advances in other forms is a frequent mistake made during the filing process. Wait until the process is complete to ensure you won’t still be accountable for these charges.
The professional attorneys at Behm Law Group, Ltd. are here to keep you from making these common mistakes and other important missteps when it comes to filing for bankruptcy in Mankato, MN. For more information, contact us at (507) 387-7200.