Filing for bankruptcy significantly impacts your life and finances, often providing a solution to a debt problem. Because of the potential impact, it’s important to approach your application delicately.
To successfully file, you have to make sure everything is in order. You are filing under penalty of perjury when you do this, which means that any inaccuracies or mistakes they find in your documents can result in harsh punishments that can make your difficult financial situation even worse.
Before you file for Chapter 7 or 13 bankruptcy, it is crucial to know what you can potentially overlook in filing and what consequences come as a result.
Types of mistakes you can make.
On your filing, you need to have correct information regarding your assets, debt, income and financial history. It is easy to overlook different parts of your finances, and people have tried to trick the court with techniques to maintain some of their money. Both of these errors lead to rejected filings.
Common issues include:
- Selling assets without telling the trustee
- Hiding assets from the court
- Failure to file income tax returns
- Filing before receiving substantial assets
- Not advising creditors of your bankruptcy
- Not listing creditors on the paperwork
- Not listing all debts
- Not including any separate income from the main source
- Obtaining more debt after filing bankruptcy
- Forgetting to list a property
- Listing an incorrect value
How you are punished.
If the court finds any inaccuracies or evidence of lying in your report, they will deny your discharge. Not including all of your paperwork also results in a higher chance that they will dismiss your case and require you to file additional documents, which means more fees on top of your debt.
On top of this, the FBI may investigate you for bankruptcy crimes. They can charge you with additional fees and imprisonment depending on the severity of the mistake. If you are filing for bankruptcy in the near future, maintain close communication with your creditors and financial advisors to avoid any potential mistakes that could land you in worse scenarios. Make sure you have every document in order and utilize resources available to you to ensure that your bankruptcy filing will go smoothly.