3 Mistakes To Avoid During The Bankruptcy Process

If you have already started the process of filing for bankruptcy, you may be eager to get the bankruptcy behind you. However, you may be making mistakes that could jeopardize the discharge of your debts, which would mean that you would still be responsible for paying them back. Here are just a few mistakes to avoid making while going through the bankruptcy process.

Trying to Pay Creditors with Retirement Funds

Most of the time, your retirement savings do not need to be affected by your financial problems. You may get the idea to liquidate your retirement savings to pay creditors, but that is a mistake for a number of reasons. First, you may be subject to taxes on the amount of money you remove from those savings prematurely. Secondly, you will not have as much money for your retirement and older years. Lastly, your Bankruptcy Trustee can recover that money and use it for other purposes anyway.

Therefore, once you have filed for Chapter 7 bankruptcy, avoid touching your retirement funds to pay for any of your debts. It will not affect your credit score or make a substantial impact on whether your bankruptcy is discharged.

Repaying Family Loans

You may think that family is important, and while you're waiting for your bankruptcy to go through, you may choose to repay family debts instead of your other debts. However, this could land you and your family members in legal trouble. In fact, in some states, your Trustee may be able to sue those family members so that the money can be taken away from them and put toward your debts.

Selling Your Property for Less Than It's Worth

As you're waiting for your bankruptcy to discharge, you may choose to sell your home and move into a smaller place. To help out a friend or someone you know, you may opt to cut your asking price without thinking twice. However, this can arouse the interest of your Trustee and become a dangerous situation for you. You may be charged with bankruptcy fraud or making an attempt to hide property from the bankruptcy court. If this happens, you may end up losing your house and so will your friend. Not only that, but you risk having your bankruptcy discharge denied.

If you want to sell something while you're waiting for your bankruptcy to go through, talk to your bankruptcy lawyer first so you know whether you can make a sale in a first place. 

Now that you know what you should not be doing, sit down and talk to a lawyer like Schneider Steve, Atty At Law about what moves you need to make next. Follow the advice of your attorney so that you can successfully make it to your bankruptcy discharge date without getting yourself in trouble.