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Avoid these things before filing for Chapter 7 bankruptcy

On Behalf of | Jan 28, 2021 | Chapter 7 Bankruptcy

It seems like financial stress is just normal for Florida residents these days. However, when an individual becomes overwhelmed financially, he or she will want to do whatever it takes to relieve the stress and pressure. Chapter 7 bankruptcy is an option for those who qualify for this form of debt relief. Here are a few things to avoid when filing for bankruptcy.

Chapter 7 bankruptcy will eliminate many forms of consumer debt, but avoid rushing into bankruptcy too quickly. An individual can only receive a Chapter 7 discharge once every eight years. Unforeseen things could happen during the waiting period that may only worse an individual’s financial situation, such as losing employment or an unexpected medical condition.

Avoid withdrawing from retirement accounts. An individual can protect most of his or her retirement funds in bankruptcy. Therefore, don’t withdraw retirement funds to pay debts that bankruptcy could discharge. Also, when filling out paperwork, avoid inaccurate or dishonest information. If an individual purposely misrepresents information, like failing to disclose an asset, he or she could face steep penalties such as fines of up to $250,000 and/or 20 years in prison.

Bankruptcy can wipe away certain types of debt and help a person find a new lease on life. However, the process does not come without consequences. Any Florida resident who has questions about Chapter 7 bankruptcy, or wonders if he or she meets the requirements, has every right to consult a bankruptcy attorney. A seasoned lawyer can provide guidance and determine the best options for the individual’s specific situation.


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