Chapter 7 takes about four months to complete. Chapter 13 takes three to five years to complete depending on the extent of your debts and your income
10. “I know I told you that I only expected a small tax refund, but my accountant says I’m getting back a large refund! Isn’t that great?” No, its not. Your attorney can protect your property, but unexpected large cash sums are difficult to protect during a bankruptcy. Generally it is advisable to receive (and spend) your income tax refund prior to filing your bankruptcty case.
9. “Before I came to see you I paid a debt counselor a lot of money.” Individuals can lose thousands in fraudulent debt counseling. While there are legitimate programs that can obtain positive results, many are just plain scams and end up making matters much worse for you and your family.
8. “I cashed out my retirement account and paid off my credit cards.” Retirement accounts are generally assets that can be protected in a bankruptcy and beyond the reach of most creditors, while credit card debt is typically the easiest type to discharge.
7. “I paid off my car with my tax refund.” Having too much equity in a vehicle will result in payments to the bankruptcy trustee. In other words you first paid for your car, and then you must pay the trustee for the non-exempt equity in the car. That means you pay TWICE for the same car!
6. “I repaid a loan to a family member before coming to see you.” Payments to a family member prior to filing bankruptcy is a big mistake. He or she may be forced to turn over the payment to pay your creditors. Of course you want to pay your family member, and you can certainly do so, but let a qualified professional help you do it the right way.
5. “I transferred my house/car/etc. to my mother to protect it.” Another regrettable mistake. By trying to protect an asset without your attorney’s help you could actually strip any protection it might otherwise be entitled to.
4. “I took out a payday loan after our consultation to pay for the bankruptcy.” Incurring a debt with no intention to repay is not only non-dischargeable in bankruptcy, it could land you in criminal trouble!
3. “I went on a shopping spree with my credit cards before I came to see you.” This seldom happens because most people have better common sense. As a general rule the shopper will be paying that money back to the credit card company.
2. “I just got my chapter 7 discharge and I found out my grandmother left me a large inheritance.” This news is sad in many ways; not only is the loss of a loved one a tragic event, but the bankruptcy court may order you to turn over the inheritance.
1. “I didn’t tell my attorney this, but…” The worst news of all! Always answer your attorney’s questions honestly and completely. Hidden assets or transfers can prevent you from receiving a bankruptcy discharge and may result in federal criminal charges.