For some reason, there’s always been somewhat of a stigma attached to filing for bankruptcy. People living in Middle Tennessee or anywhere else in the nation often hesitate to use this legal option for fear of what others might think, or that they’ll appear as financial failures to loved ones. If you’re one of these people, you might find it surprising to learn that many financial advisers believe people who file for bankruptcy often wind up more financially stable than those who don’t.
Financial crises typically develop over time. Yes, sometimes an unexpected catastrophic event occurs (loss of a job, death of a loved one, etc.) that brings sudden, substantial debt upon unsuspecting families. These families are often completely unprepared to meet such exorbitant expenses. However, more often than not, serious financial debt accumulates over time, often just trying to make ends meet for the family.
Things to avoid when considering bankruptcy
If you’ve finally decided that filing for bankruptcy provides you with the most viable option to resolve your current money problems, get life back on track and head toward a financially stable future, there are some things to be aware of and steer clear of, as you prepare to navigate the system, including the following:
- It’s usually a bad idea to make very large payments to a particular creditor if you plan on filing for bankruptcy. Instead, it’s best to continue to make steady, monthly payments to all creditors, if possible. Otherwise, the court could wind up suing the creditor to whom you gave a larger payment than the rest (if you file for bankruptcy) for return of the money because it’s considered a preferential payment.
- New expenditures are not typically a good idea, either. In fact, the court and trustee could accuse you of fraud.
- Full disclosure is the name of the game when filing for bankruptcy. Trying to hide assets or not providing complete information will cause you unnecessary trouble.
- If you’re aware that you’ll receive a large sum of money in the near future, it’s wisest to hold off on filing for bankruptcy, and use the funds to pay off as much of your debt as you can.
You will have bankruptcy options
Several types of bankruptcy exist, and each carries different eligibility requirements that you must fulfill in order for the chance to have the court grant your request for debt relief. Much depends on your particular financial situation — what assets you have, how much debt you have, along with other considerations. The best option for you may be the worst for another person in Tennessee.
A bankruptcy attorney can explain all aspects of the law regarding the topic, as well as review an individual case to help determine the available options and advise you which one best suits that person’s immediate financial needs and future goals.