Proactive Bankruptcy – It Pays to Get Good Advice Early
If you are considering bankruptcy as a solution to your debt problems, you can save time and money by seeking good legal advice early to make a strategic plan. This is especially true if many of your debts are already in collections or you have received notices of foreclosure. While some people may need to file a bankruptcy petition immediately, others may decide to postpone their filing until after the financial event is stabilized. Avoid accumulating more debt and better your chances of successfully completing the bankruptcy process by not making these common mistakes:
Exchanging an unsecured debt with secured debt
Homeowners who are considering filing for bankruptcy should not take on additional debt, especially secured debt, such as a home equity loan or second mortgage and use the loan to pay unsecured debts. In bankruptcy much of your unsecured debt can get discharged. Additionally, you risk losing the collateral of a secured loan if you miss payments.
Paying off debt using money from your retirement funds
Most retirement accounts and pension funds are assets that you may exempt – meaning they survive the bankruptcy process. Many filers are able to keep these assets, so you may not need to tap into these savings to settle debts.
Gifting assets or property
Avoid the temptation to give away your assets or property just before you file for bankruptcy. An experienced Los Angeles Bankruptcy Attorney can help protect your property from creditors. Some transfers made before you file can lead to charges of fraud. In reality, much of your valued property like your car, home, cash and some jewelry may qualify for a bankruptcy exemption. Furthermore, bankruptcy trustees have the authority to recover any non-exempt property once they discover the transfer.
Ignoring pending lawsuits
Be sure to respond to legal actions served on you before and after you file for bankruptcy. A creditor may take legal action until the automatic stay goes into effect. You should inform your attorney if a creditor tries to collect on a debt after you file your petition.
Most importantly, keep your Los Angeles bankruptcy attorney informed concerning everything related to your finances. This information is essential to protecting your rights. Contact the Law Offices of Michael Jay Berger to have your case evaluated.