Top Five Mistakes Made Prior to Filing for Bankruptcy

Bankruptcy is a mysterious process to many and in some cases people are embarrassed to admit bankruptcy is their only option. Unfortunately, society has created a bankruptcy stigma and people who choose to file believe they will be viewed as irresponsible or careless, and avoid filing, even if it is in their best interest.

As more honest discussion about bankruptcy occurs, attitudes will change. Additionally, because of the current financial and employment crisis in the country, more and more people are choosing to file. As a result of the negative stigma attached to bankruptcy, many people fail to see the opportunity bankruptcy provides. Likewise, they put off filing for bankruptcy until the latest possible moment or do so in secret, choosing not to seek the support needed to ensure a positive outcome. Ultimately, mistakes occur and their bankruptcy experience is completely negative.

Hopefully one day, people will approach the bankruptcy process from a different point of view. In the meantime, if you decide filing for bankruptcy is right for you, it is important to avoid these common mistakes prior to filing:

Postponing Bankruptcy and Pretending Everything is Fine

If you have reached the point where your monthly income is less than what you owe each month, you have a problem. Taking action sooner rather than later can prevent your financial struggles from getting worse.

Being Dishonest with Creditors

Honesty is your best policy when it comes to financial problems. Creditors might be willing to help you if you are upfront with them about your struggle. By avoiding the problem and being dishonest, they are less likely to help. Additionally, because their extension of credit is a matter of contract law, you might end up with worse legal problems than just debt.

Depleting Your Savings and Financial Reserves

If you are considering dipping into your retirement savings to pay bills that you cannot otherwise afford, you have a problem. It is always better to protect your savings – and keep some cash liquid – even if it means you need to file for bankruptcy.

Feeling Shame about Your Financial Situation

Financial struggles are one of the most common problems faced by Americans today. There is no reason to put off solving your problem because you feel embarrassed or ashamed.

Handling Your Bankruptcy without Support

Bankruptcy is a complicated legal process and if not handled correctly, your case can be thrown out of court or you could jeopardize otherwise protected assets. Working with a bankruptcy expert not only ensures your case is managed properly, it means you will receive the support and guidance you need.

If you would like to know more about bankruptcy or you have questions specific to your situation? Contact the law office of Frank J. LaPerch, PC at 845.942.5500.