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Avoiding Costly Bankruptcy Mistakes

On Behalf of | Apr 13, 2016 | Bankruptcy

In order to avoid paying for an attorney, many people facing serious debt decide to handle their bankruptcy proceedings on their own. However, most people don’t really understand the nuances of bankruptcy law and there are many bankruptcy myths out there.

Armed with misinformation and myth, many people charge forward and make serious mistakes that cost them dearly in the long run.

According to the Caseload Statistics Data Tables published on the U.S. Courts website, more than 800,000 individuals filed for bankruptcy in 2015 alone (819,760, to be exact), and that does not even include business filings.

With the number of people filing for bankruptcy, it is important for people to know the risks involved. By not working with an experienced bankruptcy attorney, you could run the risk of:

· Losing your assets.

Far too many people make simple mistakes in the bankruptcy process that result in losing cars and other expensive items. Some people facing debt will even liquidate their retirement assets to pay debts. But there are exemptions available in New York for many items, and retirement benefits are usually untouchable in the bankruptcy process, so liquidating retirement savings to pay off debt before bankruptcy is never a good idea.

· Losing your home.

Although you would lose your home if you unable to maintain payments in a Chapter 7 bankruptcy, there are other options available. A chapter 13 bankruptcy might allow you to keep your home in a manageable payment plan. A smart lawyer would also help you manage your debt and income to see if you could keep your home even in a Chapter 7. Depending on your circumstances, it might be possible to shield your home from bankruptcy proceedings. By eliminating credit card debt, medical debt and other debt – and by ordering your finances wisely – an experienced attorney could help you find a way to keep your home.

· Losing their opportunity for bankruptcy relief.

There are times when simple filing errors, erroneous calculations and strategic mistakes render people unable to obtain bankruptcy relief. A seasoned attorney will understand the process, see the possible pitfalls and make sure to get all of the details in order to avoid this mistake.

For anyone struggling with serious debt problems in the New York area, it is critical to talk with a skilled, knowledgeable lawyer before making any decisions regarding bankruptcy.