Taking the plunge into the realm of bankruptcy is daunting, especially when overwhelmed by debt. To many, managing the proceedings without professional assistance may seem like a wise decision, aiming to save costs.
The reality, however, is that bankruptcy laws are intricate, complex, and fraught with pitfalls. An expert’s guidance not only deciphers this complex legal maze but also provides a safety net, ensuring you don’t unknowingly commit bankruptcy fraud—a potentially devastating mistake. Contact The Law Offices of Paul Y. Lee at 951-755-1000 before moving forward with your bankruptcy filing.
Four Common, Yet Dangerous, Pitfalls of Bankruptcy Filing
The path of bankruptcy is intricate, filled with potential mistakes that can inadvertently lead to accusations of fraud. Here’s a more in-depth look at four such pitfalls:
1. The Perils of Ignoring Contested Debts
Having debt collectors knocking on your door is distressing, especially when there’s a dispute about the amount or even the very existence of the debt. But regardless of personal beliefs about the debt’s legitimacy, every single one must be declared when filing for bankruptcy. Mark them as “disputed” if you must, but excluding them entirely is a perilous path. In the chaotic realm of debt, forgetting or intentionally omitting a contested amount can be the misstep that leads to accusations of fraud.
2. The Subtleties of Biased Transfers
The realm of bankruptcy is governed by the principle of fairness. When you file for bankruptcy, it’s the court that dictates how your assets are distributed amongst creditors. Any attempt to pay off certain creditors before filing can be perceived as favoritism, casting a shadow on your proceedings. Furthermore, transferring assets, especially to close family and friends shortly before filing, can be viewed with suspicion. Many individuals, unaware of the intricate rules surrounding transfers in the year leading up to bankruptcy, inadvertently make choices that paint them in a fraudulent light.
3. The Danger of Under-declaring Your Assets
Whether by design or genuine oversight, failing to declare all assets—money, property, investments—is the most frequent trigger for bankruptcy fraud allegations. Maybe you’ve forgotten about an old pension fund, or perhaps there’s a dormant savings account you haven’t accessed in years. Such oversights, while innocent, can swiftly complicate your bankruptcy process.
4. Overlooking Future Assets
Assets aren’t just what you own now; they also encompass what you stand to receive in the near future. Whether it’s an impending inheritance, a likely lawsuit payout, or an about-to-mature insurance policy, these anticipated assets must be declared. Failing to do so, even inadvertently, can lead to serious complications in your bankruptcy proceedings.
Have You Erred? The Road to Rectification
Even if you’ve unknowingly made errors in your bankruptcy filings, all hope isn’t lost. It’s crucial to communicate to the bankruptcy trustee that any inaccuracies were genuine mistakes, not deliberate attempts at deception. Yet, with potential repercussions like prison and substantial fines, it’s prudent to enlist expert assistance. Why wait for complications to arise when you can get it right from the outset? Armed with professional guidance, you can navigate the tumultuous waters of bankruptcy with confidence. Reach out to The Law Offices of Paul Y. Lee at 951-755-1000 to ensure your bankruptcy journey is smooth and free from unintended errors.
