There are many reasons why people file for bankruptcy and below are the common mistakes to avoid when filing for Bankruptcy in Washington. From credit card debt, to loss of income, to a divorce—bankruptcy is an effective, legal way to help you get back on your feet financially. When it comes time to file for bankruptcy in Washington State, there are a few things you need to keep in mind to prevent unnecessary complications.
When it comes to Chapter 7, Chapter 13 or Chapter 11, keep in mind that you’re not going to be able to fool the court or cleverly hide your assets. Millions of people have filed bankruptcy and the legal system has seen and heard it all. There is a 100% chance you will cause more harm than good if you attempt to pull a fast one over the court.
Disclose Everything to Your Tacoma Attorney
Without a doubt, this is one of the most important aspects that many people tend to overlook. The reason you hired a bankruptcy attorney is to help guide you through the Washington bankruptcy process. As such, you need to disclose everything regarding your income, assets and financial status.
The advice you receive from experienced and trusted attorney is based upon the particulars of your unique financial situation. If you’re withholding information, it could come back to bite you at a later point in time. You should also be aware that the bankruptcy process requires you to disclose everything to the court – your assets, debts, income, creditors and even multiple prior years of financial history prior to the bankruptcy filing.
Do Not Repay Relatives or Insiders
In the eyes of the court, your relatives do not have any special legal status that puts them in a protected class above your other creditors. Prior to filing Washington bankruptcy, do not repay any loans your relatives may have given you. Otherwise, the bankruptcy trustee can come after your relative in pursuit of the money you paid them. They will then redistribute those monies to the same-class creditors.
An “insider” is considered to be a friend, business associate or a creditor whom you might have a favorable relationship with. You can’t pick and choose who gets paid off first. That is up to the trustee to manage the disbursements.
Do Not Incur Any Additional Debt
Once you have made up your mind to file for bankruptcy, do not incur any additional debt that you don’t intend to repay in full. This includes using your credit card to buy a $5 latte at the local coffee shop. The court may deny your right to cancel the debt in bankruptcy, or they could view it as a criminal matter.
Don’t Pull Money from Retirement Accounts
Retirement funds are usually protected in bankruptcy procedures. The court may allow you to discharge your debt without coming after your retirement fund. Avoid touching those monies unless it’s absolutely necessary. The court recognizes that a retirement fund is there to help you live once you retire.
Don’t Transfer Property
Transferring property out of your name will not prevent the trustee from taking it from you. If you transferred property to a relative, the trustee will come after the relative in order to gain possession of the property. It’s best to not transfer anything out of your name, prior to getting legal advice.
Schedule a Free Consultation with Your Tacoma Bankruptcy Attorney
When it comes time to file for bankruptcy, you need a compassionate and skilled attorney who will be able to guide you through the process as cleanly as possible. Northwest Debt Relief Law Firm, we can help you with filing for Chapter 7, Chapter 11, and Chapter 13 bankruptcy in Washington State. We will be there every step of the way to help navigate you through the often-complex and difficult bankruptcy process.
Give us a call at (253) 780-8008 to schedule a free consultation with one of our bankruptcy attorneys. If you have any other questions about bankruptcy, one of our attorneys will be more than happy to offer advice on your particular situation.
