A common mistake debtors make is trying to conceal their assets before filing for bankruptcy.
Phoenix, AZ – Thinking about filing for bankruptcy, either as a private individual or as a business entity in Phoenix? Then you want to make sure you tick off this brief checklist before doing so!
In many cases, filing for bankruptcy can be a real God-send, offering debtors a way out of their financial obligations. The idea behind filing for bankruptcy is that it gives you a fresh start, while also settling your debts.
Below, you’ll find the 5 things experienced lawyers advise their clients to do before filing for bankruptcy, to make your court case go as smoothly as possible.
- Attend credit counseling.
Bankruptcy is regarded as a federal matter, meaning all states abide by the same general rules. And one of those rules states that before a person is allowed to file for bankruptcy, they must first attend authorized credit counseling.
What is credit counseling? Credit counseling is basically seeking help when you’re in financial trouble. It’s important to make sure you attend credit counseling with someone authorized by the Department of Justice, else the courts may not recognize your counseling.
Basically, credit counseling will help you explore all other options (such as lower tax rates, or finding other ways to keep yourself or your business afloat).
- Get your paperwork in order.
Photo by Melinda Gimpel on Unsplash
The better organized you are, the faster the process will go, seasoned Phoenix bankruptcy lawyers say. So, even before you decide to file, you’ll want to gather and go over all your financial documents.
Your lawyer will need easy access to all information pertaining to your assets, income, debt, loans, or other financial activity. Don’t worry if you’re not sure what to include – you can consult with your attorney, and they’ll advise you on how to proceed!
- Do NOT sell/transfer assets.
A common mistake debtors make is trying to conceal their assets before filing for bankruptcy. It might sound tempting to transfer certain valuables to a spouse or family member, or even sell them before declaring bankruptcy (without declaring that income).
However, this is regarded by the courts as an attempt to obstruct justice and is basically tantamount to lying. Since a bankruptcy case does look back over your financial moves, the courts will uncover whatever “deal” you tried to make. This may result in your bankruptcy case getting thrown out, with even the best Arizona bankruptcy lawyers unable to save it. Worst case scenario, you may be charged with fraud and face criminal penalties.
- Make sure you meet residency requirements.
This might not be the first thing on your mind when considering bankruptcy. However, it’s important to make sure you meet the residency requirements enabling you to file for bankruptcy in your state of choice.
According to Arizona regulations, an individual must have resided in the state for at least 730 days prior to submitting their petition. Failure to meet these requirements may obligate you to file for bankruptcy in your official home state.
- Consult with an experienced attorney.
Lastly, before filing for bankruptcy, you want to make sure to contact the best Phoenix bankruptcy lawyers. An experienced, specialized lawyer will walk you through the whole legal process, and help determine the best course of action for you.
Join the conversation!