Mistakes You Need To Avoid When Filing For Bankruptcy

Before you start the paperwork for your bankruptcy, you have to make sure you avoid certain mistakes. In many cases, these mistakes can delay or prevent your bankruptcy from going through the court system. For these reasons, you must pay close attention to all of your paperwork so you can file the correct information to complete your bankruptcy.

Wrong Financial Amounts

When compiling your financial information, you know that this should include your income sources. Your income amounts will be from your employer, home business or any federal assistance you receive. However, it is easy to forget about the other financial amounts that you also need to include.

These other financial amounts will be money you receive to help subsidize your household bills such as food stamps or monetary assistance from a charity that paid any bills such as your electric or water bills. In some areas, you may not need to report these amounts, so you should consult your lawyer if you are unsure.

Additional financial information that is also easy to forget about is your retirement accounts. Even though you do not use your retirement account to pay bills, the courts still need a record of the money in these accounts.

Failure to report this information can be constituted as fraud, which is why you must give the courts the correct amounts for each financial account in your name. You also need to include the information for accounts you share with another person, even if they not filing for bankruptcy.

Incorrect Household Number

Another area that you can easily miscalculate is the size of your household. This number needs to include everyone that lives in your area. You household size is primarily used to during the median test to determine if you are eligible for Chapter 7 bankruptcy.

For example, to file for Chapter 7 bankruptcy, your income level needs to be below the median or average income level for your state. If you do not fall below this amount, you can only file for Chapter 13 bankruptcy.

In some states, any person sleeping in your home is to be added to your household size. However, in other states, you have to be providing financial assistance for a person to add them to this number. For example, if you have a child in college that is living with you and not working, you can include them in your household size.

By taking the opportunity to understand the more common mistakes, you will have an easier time avoiding them. If you have any doubt about the information you need to give to the courts, it is best to consult with an experienced bankruptcy attorney like Bill Bodensteiner Attorney At Law, to get the answers to your questions.