The idea behind filing for bankruptcy is a desire in the law to help individuals and businesses too far in debt catch up or get a fresh start. If you don’t file the right type of bankruptcy, or make errors during the process, you may not get the fresh start you were searching for.
Choosing the Right Filing for You
Certain types of debt are not dischargeable, such as orders to pay child support, government tax obligations, and student loans. Other types of debt are likely dischargeable, such as credit card debt. Of course, there are always fraud considerations that will affect whether a debt is dischargeable.
In addition, a person may make too much money to file one type of bankruptcy, but not too much to file a different kind of bankruptcy. Or a person may be able to file one of multiple types of bankruptcy, but one will have much better results for the individual than the others.
Errors May Have Devastating Consequences
If a person makes an error in a document that must be filed, or fails to file a required document, the person’s case might be dismissed. Or if a person seeks discharge of one debt but fails to list the debt, the debt might not be discharged, defeating one of the main reasons that person decided to file bankruptcy in the first place.
Homeowners who are having trouble or have fallen behind in making their mortgage payments may have options that would allow them to avoid foreclosure and bankruptcy.
Beware of offers made once your house is in foreclosure – there are a number of fraudulent schemes specifically directed at individuals facing foreclosure. Contact your state attorney general or other state consumer protection agency regarding any suspicious proposal, such as one that requires transferring your property to a third party in order to avoid foreclosure.
Beware of bankruptcy petition preparers who do not comply with all legal requirements. The role of non-attorney petition preparers is solely to type information on bankruptcy forms, which are available on the United States Courts website at no charge.
Petition preparers are barred by law from providing legal advice – they cannot explain how to answer legal questions or assist in bankruptcy court. Petition preparers must sign all documents they prepare; print their name, address, and social security number on such documents; and furnish copies to the debtor. They cannot sign a document on the debtor’s behalf or receive payment from the debtor for court fees.