1. CONSOLIDATING MY DEBT IS BETTER THAN FILING BANKRUPTCY.
In theory, consolidating seems like a good and viable option. However, in practice, consolidation rarely works out, and experience shows that in the long run, people don’t save money but in fact it ends up costing them more.
2. DON’T WAIT UNTIL YOUR BROKE BEFORE CALLING AN ATTORNEY.
If you aren’t going to be able to catch up on all your bills and get ahead, you are wasting your money. Filing bankruptcy will get rid of all your debt. There is no point paying bills that will be wiped out anyway. Save your money to pay the fees of filing anyway, that will much cheaper than paying bills you can’t afford to pay.
3. BANKRUPTCY WILL RUIN MY CREDIT.
Really??? If you are unable to pay your bills, your credit probably already stinks. Filing bankruptcy is not going to make your bad credit any worse. To the contrary, by filing your credit will begin to rebound if you’re smart about building it after you file. Bankruptcy is a way to fix your credit and debt problems, it did not cause them.
4. DON’T PAY OFF YOUR PARENTS AND FRIENDS BEFORE YOU FILE.
Now I know what your thinking, it sounds wrong, but by not paying your family and friends you are actually saving them from a big headache and problems. In bankruptcy, the trustee (the person overseeing your case) can go after your parents and friends and take the money you have paid them to pay that money to other creditors. Your family and friends won’t be happy if you get them involved in a legal proceeding because you paid them.
5. DON’T PAY OFF YOUR CAR LOANS BEFORE YOU FILE A BANKRUPTCY.
By having a lien on your car, you protect the car in the bankruptcy. The trustee is trying to find any asset (like your car) you own that may be used to pay back your creditors. The loan on your car usually makes that option not viable and the trustee likely will not pursue the sale of the car.
6. DON’T TRY TO HIDE ANYTHING, DISCLOSE EVERYTHING YOU OWN.
Failing to list any property you own can potentially lead to criminal action against you for bankruptcy fraud and make it so you lose your discharge (the thing that wipes out all your debt) in bankruptcy. Plus, its like the trustee is magic, he usually ends up finding out about everything, it’s just not worth it considering the penatly you face if you’re caught lying.
7. DON’T PUT YOUR MONEY IN SOMEONE ELSES ACCOUNT OR GIVE THEM YOUR PROPERTY.
In the list of the worst things you can do when filing this may be 1(b) coming in just behind the one we just talked about. The trustee could very likely go take the money and property back. This goes for any transfer within a year of filing. Like number 6 above if you do this you risk not being able to have your debt forgiven.
8. DON’T LIQUIDATE YOUR RETIREMENT ACCOUNTS.
Your retirements are protected, by liquidating them you take them from being a protected asset to a general asset than the trustee can come after to pay debt with. You are still going to need retire someday so save if for what it’s there for.
9. FILING BANKRUPTCY DOESN’T MAKE YOU IMMORAL OR A BAD PERSON.
Look, this isn’t meant to be a phylisophical or religious statement. If you’re broke, your number one responsibility should be to your family’s needs. The law allows people to file bankruptcy as a way of dealing with debt. The creditors use the law to help themselves in the same way through tax subsidies, charge offs and law suits. Whether or not this is a justification for filing it’s the reality, it’s you’re right to file.
10. I DON’T HAVE A TENTH BUT THOUGHT TEN SOUNDED BETTER THAN NINE.
Take time to think about your options, but not too much time. You’re wasting your money and stress on things that can be taken care of so easily.
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