19 Dec 5 Things Not To Do When Filing For Bankruptcy
If you are currently filing for bankruptcy here in Minnesota you’re probably wondering what you can and can’t do. You’re wondering just how much freedom you might have. The unfortunate truth is, not much. The process is typically formal and requires you to be on your best behavior financially.
Filing for bankruptcy can also be an emotional process. There are many things you just can’t do.
Here are 5 of them.
Get A Large Loan
You should never try to get a large loan when going through a bankruptcy. This is especially true for Chapter 13 filings that tend to take 3 to 5 years. Don’t go out and try to buy a new car, furniture, or appliances. It’s important you learn to stick with what you have while you are paying off your debt.
When you go and get loans you are putting yourself at risk of not being able to stick to your payment plan. While most loans you apply for will get denied due to your credit history others might go through. This doesn’t mean you need them. Use the time that you are paying back your debt as a period of reshaping. Teach yourself to live without credit.
You’ll be better off when your bankruptcy is complete.
Spend A Ton Of Money
Your main focus during a bankruptcy should be to save as much money as you can. This means putting money aside for future purchases and thinking before you drop any amount of money on new items. Chances are if you’re going through a bankruptcy you don’t have a lot of funds to throw around anyway.
This means you’ll need to be extra vigilant when it comes to your paychecks and accounts. Your payment plan with a Chapter 13 will be deducted from your account on a monthly basis. If the funds aren’t there to be processed you’ll be hit with fees and run the risk of being late.
Apart from your payment plan and other household necessities your spending should be low. By paying attention to where your money is going you can teach yourself to be more aware of your finances. This will help you when your bankruptcy is over.
Hide Any Incoming Funds From The Court
No matter how much you want to it’s never a good idea to lie to the bankruptcy court. This includes hiding any new funds you might acquire. These funds can be from gifts, or even settlements. If you aren’t sure whether you will be able to keep these funds consult your bankruptcy attorney or consider hiring one. It’s important you know how to handle this situation to avoid a negative outcome.
When it comes to gifts you might be scared they will make you use the funds to pay towards your payment plan. Chances are they will, but that doesn’t mean you should pretend like they aren’t there or forget to tell the court.
100% honesty is necessary when going through a bankruptcy. Lying to the bankruptcy court is considered a felony. This means you’re going to spend time in jail if you get caught. You just have to ask yourself if it’s worth it.
Miss Or Be Late On A Payment
Another thing you don’t want to do is miss or be late on your payment plan. This can result in your creditors resuming their onslaught. Also, if you didn’t lose much in the beginning you run the risk of losing personal property.
You don’t want to quit paying on your bankruptcy before it’s over. This can result in your bankruptcy case being dismissed. A bankruptcy is already bad enough for your credit. The damage of a dismissed bankruptcy case is significant and will take a while to bounce back from.
There is a way for you to get your bankruptcy reinstated if you file again shortly after your case is dismissed and you bring your payments up to date. Not letting it get to that point is important though. If you try to file again the court will not allow you to if you disobeyed the court or voluntarily dismissed your case.
If you have any questions or concerns about filing for bankruptcy, give us a call. We’d love to have the opportunity to represent you in your filing. Here at Bolinske Law we know the importance of stress free Minnesota bankruptcy filing and will help you make that a reality.