Chapter 13 bankruptcy relief offers filers a unique opportunity to receive protection from debt collection actions while allowing them to repay creditors an amount that the filer can afford. The second most commonly filed bankruptcy chapter, this financial reorganization gives an individual up to five years to pay creditors. A good option for those who own property that they do not wish to surrender, chapter 13 can lead to additional problems if the debtor makes a mistake when filing for relief. Being aware of these top four chapter 13 bankruptcy mistakes can decrease your chances of filing errors that strip you of some of the protections you expected to receive.
Leaving Out Documents
There is a lot of documentation included in any bankruptcy filing and a chapter 13 is no exception. The final petition will include your bank statements, recent tax returns, and pay stubs along with the paperwork that outlines your debts. Omitting certain information, especially anything income related, could lead to serious consequences. Not only could the bankruptcy court dismiss your case entirely, you may find yourself facing criminal charges if the court feels that you deliberately acted in bad faith by attempting to conceal assets from the court.
Not Mentioning a Future Asset
During the proceedings you will be asked if you expect to receive any inheritances or financial settlements. One thing that many forget to mention are existing claims such as car accidents. Any funds received in the form of a car accident settlement are an asset and must be mentioned to your bankruptcy attorney along with the court. If you know that you have an open claim against a third party when you file for bankruptcy and the court discovers that you failed to mention it, then you could have a lot of explaining to do along with a dismissed case.
Failing to Finish Your Classes
Credit counseling and post-bankruptcy classes are a mandatory part of your filing. Even if you make all of your chapter 13 payments, failing to finish these classes could lead to the dismissal of your case. The counseling courses are meant to ensure that you learn from your experience and you must complete the classes before your case is discharged. Taking your classes and finishing them at your earliest opportunity is the best way to avoid hitting this hurtle when you are so close to the finish line.
Forgetting to Update Your Case
During the three to five years of your chapter 13 case it is normal for things in your life to change. When these changes occur, you must remember to tell your attorney so that your bankruptcy case is updated. Changing jobs, acquiring new debt such as medical debt or a judgment against you, and any unexpected expenses that you face should be disclosed. Sometimes the changes will not affect your repayment plan, but it is always best to update your case and give your attorney an opportunity to make sure you are not doing anything that could jeopardize your case.
Adam Law Group
Chapter 13 bankruptcy attorneys at Adam Law Group are here to provide you with the legal advice you need throughout each stage of your filing. We are here to help you with an existing case or aid you with establishing a new one. Contact us at our Jacksonville, Florida office to schedule your initial consultation today.