If you are thinking about filing for bankruptcy, you can be well on your way to a more stable financial future. Bankruptcy can give you the debt relief and fresh start you need to get back on track. However, bankruptcy is not a simple one-way ticket to financial stability.
You must be careful before, during and after bankruptcy. If you make mistakes, you can derail your opportunity to reach a more stable and less stressful financial situation. Avoid the following mistakes to make the process work as smoothly as possible:
1. Going on a shopping spree before your filing
You might think it is no big deal to charge up your credit card right before filing for bankruptcy. According to personal finance advice website The Balance, this is a big bankruptcy mistake. Substantial purchases charged right before you file may not qualify for a discharge, especially if you purchase luxurious goods or services.
2. Hiding assets during your case
It might be tempting to discretely transfer money to a relative or fail to disclose a bank account, but it is against the law. Attempting to hide assets can make you lose out on your discharge. It could also leave you with fines and criminal charges. The risk is not worth it. Just be honest and you are sure to make it through your bankruptcy case.
3. Ignoring your credit score after your debt is discharged
You might not even want to look at your credit report after bankruptcy in fear that it is completely trashed. This may not be the case. You should consistently monitor your credit report to ensure everything is accurate.
When filing for bankruptcy, you want to make sure everything you do is as accurate as possible. Making any of the above mistakes can damage your chances at a successful case. Make sure you are diligent throughout the bankruptcy process to ensure everything goes correctly.