Millions of people across the country declare bankruptcy every year. The best way to move forward if you’re considering bankruptcy is to work with a bankruptcy relief company who can walk you through the process. When you choose The Law Offices of Paul Y. Lee, we can help you avoid some of the common mistakes people make before they file. Read on to learn more about them and then contact us at 951-755-1000 for your free consultation.
- Don’t take on new debt
- Don’t borrow money against your home
- Don’t take money out of your retirement plans
- Don’t pay back your family or friends right before you file
- Don’t skip your California bankruptcy exemptions
If you take on new debt right before you declare bankruptcy, it may appear to the judge to be fraud. The bankruptcy judge is going to consider a wide range of factors about any debt you taken on, whether it’s on credit cards, additional loans, or cash advances. They’ll want to see the amount of the new debt, how long ago you took it on, whether it was a luxury purchase, and other factors. You don’t want to risk your discharge for a purchase you don’t need to make.
It’s never a good idea to take out a loan against your home to pay unsecured debt, such as credit card debt. If you declare bankruptcy, you could claim as much as $175,000 in your home as exempt, depending on whether or not you’re married, your ate, and your health. Speak to a bankruptcy attorney by calling 951-755-1000 to learn more.
In many cases, retirement plans are completely exempt from liquidation in a California bankruptcy. As a result, we advise you not to take out any money from your retirement accounts, IRAs, 401ks, etc.
It’s common for a person who’s in debt to take on a loan from friends or family. It’s also common for that person to want to pay back their friends or family before they declare bankruptcy. However, if you pay back someone you have a personal relationship with within one year of filing, it’s likely to be considered a preference transfer. This can lead to lawsuits against your friends and family and is another reason that you want to speak to a bankruptcy attorney before moving forward.
There is property that’s exempt from unsecured creditors in a bankruptcy. You’ll want to review all the potential exemptions to make sure you’re not missing out on them. However, with so many options, it can be easier said than done to figure out what you qualify for.
Get expert advice from a bankruptcy attorney
Are you ready to move forward with a bankruptcy but you’re not sure what the next step is? Are you still considering your options and simply want to better understand if Chapter 7 or Chapter 13 Bankruptcy is better for you? No matter where you are in the process, right now is the right time to contact The Law Offices of Paul Y. Lee at 951-755-1000 for a free consultation.
