When people think about errors and bankruptcy, they usually focus on errors and oversights that contribute to financial difficulties such as excessive spending, habitually paying only the minimum amount required on credit card bills, buying “too much house”, and so on. However, there is another set of errors that are potentially much more serious — and can be financially devastating. These are mistakes that people make when they filing bankruptcy. According to experienced bankruptcy attorney Charles H. Huber (learn more at www.charleshuberlaw.com), here are the 3 biggest blunders:

  1. Lying or withholding information in a filing bankruptcy.

Without question, the single worst thing that someone can do — regardless of their financial situation or details — is lying or withhold information in their filing bankruptcy (or other associated submissions and documentation).

When — not if — the court becomes aware of the deceit or fraud, they will almost certainly dismiss the case with prejudice. This means that creditors will resume their aggressive collection activities, interest on the debt will be added retroactively to the date of the initial filing bankruptcy (not the date the case was dismissed), and the individual in question will likely be barred from filing for bankruptcy for several years.

And in extreme cases, debts that were going to be discharged in a dismissed case will be barred from a future filing bankruptcy, and the matter may be handed over to prosecutors for a criminal fraud investigation.

If all of the above sounds terrifying, then good: it should, because it is! Yet with this being said, it is (sometimes) permissible for individuals to unintentionally submit erroneous information, or leave out information. For example, an individual may have legitimately forgotten about an old debt, or they may truly not know that their debt was sold to a third party (this happens frequently). In such instances, through their bankruptcy attorney individuals need to update the court immediately, and explain that the missing or wrong information was an honest and reasonable mistake.

  1. Put off filing for bankruptcy based on false hope (i.e. denial).  

Filing for bankruptcy is a serious decision and cannot be taken lightly. It is indeed wise for individuals to do their research to determine if a filing bankruptcy is in their best long-term financial interest.

However, the mistake that many individuals make is that, despite confirming that they should file for bankruptcy, they continue putting it off because they hope that things will turn around. For example, they imagine that a relative or friend will offer them a loan, or that a creditor will back off and forgive a debt (or at least, accept pennies on the dollar).

While it is helpful to think positive, it is even more important to be realistic. Debt does not go away with the passage of time. It only gets worse and harder to deal with. As such, individuals who objectively confirm that they need to file for bankruptcy should do so as quickly as possible. Putting it off and hoping that a miracle will happen is not strategic. It is denial.

  1. Not hiring an experienced bankruptcy attorney.

There are many situations — including some legal ones — were taking the do-it-yourself route can potentially be a good move. For example, many people who file a case in small claims court choose to represent themselves.

However, when it comes to a filing bankruptcy, the do-it-yourself route is a mistake. Bankruptcy law is complicated. There are strict deadlines and a specific protocol that must be followed. Ignorance of the law is not a defense, and the court has zero sympathies for individuals who try to save money by handling things themselves. Furthermore, an experienced bankruptcy attorney ensures that everyone plays by the rules, including creditors and the court-appointed trustee.

The Bottom Line 

Contemplating filing bankruptcy can be stressful, and this makes it difficult to think clearly and make the right decisions. However, it is vital that you (or someone you care about) avoid the above mistakes. They can be more than problematic — they can be catastrophic!

About Asad Sami:

I am efficient and active person, trustworthy, responsible, self-motivated, determined and hard worker. Dedicated to my work, try to put extra efforts in my tasks. I always strive to keep positive attitude and like to collaborate and enjoy working with others. I love socializing with people, like travelling and wanted to explore diverse cultures and traditions.
I bring along more than 9 years of distinguished career in the Private set up, managing entire spectrum of tasks in the field of Operations, Administration, Security and Human Resources Management.

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