Filing for bankruptcy is a major decision, often driven by overwhelming financial pressures. However, the process is complex and full of potential pitfalls that can affect the outcome of your case. Whether you’re filing under Chapter 7 or Chapter 13, mistakes can delay your case or even lead to dismissal. At Clemmons Law Firm, our goal is to help you avoid these common errors and guide you through the process smoothly.
In this blog, we’ll discuss the top mistakes to avoid when filing for bankruptcy in New York, ensuring that your filing goes as efficiently as possible.
1. Failing to Hire an Experienced Bankruptcy Attorney in New York
One of the most significant mistakes individuals make when filing for bankruptcy is trying to navigate the process alone. Bankruptcy law is complicated, especially in New York, where state exemptions and laws differ from federal laws. Without expert legal guidance, you could overlook critical details or make missteps that jeopardize your case.
An experienced bankruptcy attorney in New York can ensure that your paperwork is accurate, deadlines are met, and your assets are protected. At Clemmons Law Firm, we help clients understand the intricacies of New York bankruptcy law and provide personalized legal strategies to suit their financial situation.
2. Choosing the Wrong Bankruptcy Chapter
Another common mistake is filing under the wrong chapter. In New York, individuals typically file for bankruptcy under either Chapter 7 or Chapter 13:
- Chapter 7 Bankruptcy: Known as liquidation bankruptcy, this option is best suited for individuals with little to no disposable income who want to eliminate unsecured debts, such as credit card debt and medical bills.
- Chapter 13 Bankruptcy: Often called reorganization bankruptcy, this allows individuals to keep their assets while repaying debts over three to five years. This is typically a better option for individuals with regular income who want to catch up on mortgage payments or avoid foreclosure.
Choosing the wrong chapter can be costly and may not provide the relief you need. Working with an experienced bankruptcy attorney in New York, like Clemmons Law Firm, can help you determine which chapter is best suited for your financial goals.
3. Hiding Assets or Income
One of the most critical mistakes to avoid is hiding assets or income. Whether it’s a bank account, vehicle, or property, failing to disclose all of your assets is considered fraud and can have serious consequences, including dismissal of your case or even criminal charges.
When you file for bankruptcy, the court requires full transparency regarding your financial situation. This includes all sources of income, properties, and even recent transfers of money or property ensures that all necessary information is disclosed accurately, protecting you from the severe penalties associated with bankruptcy fraud.
4. Running Up Debt Before Filing
Some individuals mistakenly believe that they can max out their credit cards or take on new debt just before filing for bankruptcy, assuming that it will all be discharged in the bankruptcy case. However, this is a dangerous assumption. Incurring significant debt just before filing is considered fraudulent activity by the bankruptcy court, and it may lead to some or all of your debts being ruled nondischargeable.
It’s essential to avoid any large purchases or cash advances in the months leading up to filing for bankruptcy. If you’re struggling with debt, consult with a bankruptcy attorney in New York at Clemmons Law Firm before taking any financial actions to ensure you’re protected.
5. Ignoring the Means Test
In order to qualify for Chapter 7 bankruptcy, you must pass the means test, which evaluates your income level in comparison to the median income for a household of your size in New York. If you fail the means test, you may be required to file for Chapter 13 bankruptcy instead.
Failing to properly calculate or understand the means test could result in your bankruptcy case being dismissed.we help clients assess their eligibility for Chapter 7 or Chapter 13 and ensure that all necessary documentation is accurately completed to satisfy the court’s requirements.
6. Not Keeping Up With Payments in Chapter 13
If you file for Chapter 13 bankruptcy, you will be required to follow a repayment plan for three to five years. Missing a payment or failing to keep up with your repayment schedule can lead to a dismissal of your case.
We work with you to create a realistic and manageable payment plan and help you stay on track with your financial obligations throughout the duration of your bankruptcy case.
7. Failing to Take Mandatory Credit Counseling
Before you can file for bankruptcy in New York, you’re required to complete a credit counseling course from an approved provider. Similarly, after filing, you’ll need to take a debtor education course before your debts can be discharged. Failing to complete these mandatory courses can delay or even prevent the completion of your bankruptcy case.
Our team will ensure you are aware of these requirements and help you schedule these courses so that your case proceeds smoothly.
Conclusion
Filing for bankruptcy can provide much-needed relief from overwhelming debt, but the process is fraught with potential mistakes. By avoiding these common errors and working with a knowledgeable bankruptcy attorney in New York, you can navigate the process with confidence and protect your financial future.
We specialize in bankruptcy law and are committed to helping clients in New York achieve the best possible outcome. If you’re considering bankruptcy or have questions about the process, contact us today for a consultation and let us guide you through every step of your bankruptcy filing.
Contact us at 917-561-7763 to get started on the path to financial recovery today.
