4 MISTAKES TO AVOID MAKING BEFORE FILING FOR COLORADO BANKRUPTCY
Bankruptcy can help people get out from under crushing debt. When people make the choice to pursue bankruptcy as a debt relief option, however, it can take at least a few months from when they make this decision when their paperwork is actually filed with the court. This is because people may need to do things like complete the credit counseling requirement first.
In such cases, it will be critical for people to understand just what they can and cannot do prior to a bankruptcy case so that they don’t unintentionally do anything that could subvert their case in the future. Below, we’ll point out some of the most important mistakes to avoid making before filing for bankruptcy in Colorado.
Prior to Bankruptcy, Do NOT…
1 – Make a bunch of new purchases on your open lines of credit
A Chapter 7 bankruptcy case can result in a discharge of various debts, including credit card debt. Knowing this can make it tempting to run out and charge a bunch of stuff. After all, if the debt will later be eliminated, why not charge a few more things ahead of time?
Resist this temptation at all costs, though, because racking up about $600 (or more) in debt within the three or so months prior to a bankruptcy case can be considered to be bankruptcy fraud. This can end up meaning that bankruptcy petitioners:
Won’t be able to discharge the fraudulent debt
Could even face criminal fraud charges (depending on the amount of the charges).
2 – Try to hide any of your assets
Another tempting thing before bankruptcy can be to try to tuck away a few assets. For instance, people may ask a loved one to “hold on” to something for a little while, or they may even falsely report some item as stolen in an effort to try to avoid having to include it in their bankruptcy estate.
This, again, is also a very bad idea and can be considered to be a form of bankruptcy fraud.
3 – Skip filing your taxes
When people know they are going to be filing for bankruptcy, they may feel as though there is no point in filing their income taxes (especially if they know they won’t be able to pay their tax bill).
The reason this is a mistake to avoid is that failing to file taxes for any of the handful of years prior to a bankruptcy case can create problems, such as a case being dismissed or delayed until taxes are filed. This is because tax returns can be crucial to determining income, whether someone qualifies for Chapter 7 (or not), etc.
4 – Report false info in any court documents
This is another way that allegations of fraud can rear their ugly heads in a bankruptcy case. Whether lying about assets, income, or debt, any of this misinformation – including a failure to relay info (i.e., an intentional omission) – can be considered fraud, preventing petitioners from getting the discharge they are seeking – and possibly putting them on the line for criminal charges.
Denver Bankruptcy Attorney at Garcia & Gonzales, P.C.
Are you looking for real relief from serious debt? If so, you can trust the experienced Denver bankruptcy attorney at Garcia & Gonzales, P.C. to provide you with experienced help, honest answers, and the highest quality legal services.
To learn more about your best debt-relief options, as well as how we can help you, contact us today by calling or by emailing us using the drop-down contact form at the bottom of this page.
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