When you are unable to pay your bills, it can be tempting to do whatever you need to do to take care of the problem and alleviate the pressure. If you have creditors calling you and harassing you, you may be willing to do just about anything to get them to stop. However, taking the time to speak to a bankruptcy lawyer can help you plan out your steps and ensure that you do not make a costly mistake before you file for Chapter 7 bankruptcy. Your bankruptcy case will go more smoothly with a little bit of planning. 

Mistakes to Avoid Before Filing for a Chapter 7 Bankruptcy

If you are considering filing for bankruptcy, it can be easy to make accidental errors that could hurt your bankruptcy case in the long run. Here are a few different actions you should not take before you file for a Chapter 7 bankruptcy:

  • Transfer property or money
  • Only make payments to your favorite creditors and not to others
  • Buy unnecessary items using a credit card
  • Make unusual bank deposits that will create a red flag
  • Initiate unnecessary lawsuits 
  • Prepare bankruptcy paperwork incorrectly or carelessly
  • Take cash advances on your credit card
  • Purchase luxury services 
  • File for bankruptcy before you receive a valuable asset, such as an inheritance
  • Failed to file your tax returns
  • Use your retirement funds unnecessarily
  • File for bankruptcy at the wrong time

Do Not File Too Soon or Too Late

Taking the most opportune time to file for Chapter 7 bankruptcy is important. You are only allowed to receive a discharge of debt so often. For example, you can only receive a discharge of debt through a Chapter 7 bankruptcy once every eight years or once every six years after you filed a Chapter 13 bankruptcy. It is a good idea to examine whether now is the best time to file for bankruptcy.

On the other hand, it is crucial that you do not wait too long to file for Chapter 7 bankruptcy. Many people put off filing for bankruptcy because of the uncertainty, and due to concerns, they will not be able to pay their bills. Sometimes it is in your best interest to file for bankruptcy quickly. For example, if a creditor has already garnished your wages or filed a lawsuit against you, filing for bankruptcy could be adventitious before the case goes to judgment. 

Once a creditor wins a money judgment against you, they will have the right to garnish your wages, repossess your car, foreclose your house, and attach your bank accounts. Filing for bankruptcy before they can do so can help you significantly.

Contact a San Diego Bankruptcy Lawyer

Are you considering filing for bankruptcy, but you are not sure whether now is the best time? If so, we recommend discussing your case with the experienced bankruptcy lawyers at Bankruptcy Law Center. We will carefully review your case and help you avoid making common mistakes before you file for bankruptcy. We will also advise you of the best time to file for bankruptcy.