Top Mistakes People Make before Talking to a Kentucky Bankruptcy Attorney

For many people, bankruptcy is the option of last resort. The reason for this, unfortunately, is because people frequently rely on a number of myths and misconceptions when considering bankruptcy as an option when facing financial problems. Because people often hesitate to even consider filing for protection from creditors through bankruptcy court, people make mistakes that could have been avoided. All too often, these are costly mistakes, both in terms of dollars and cents and in terms of emotional turmoil and time. If you are struggling financially, consider the following top mistakes people make before talking to a Kentucky bankruptcy attorney. By doing so, you may be able to avoid some of them yourself.

• Hiding or transferring assets – if you are trying to keep assets out of the hands of creditors you may try and hide those assets or transfer them into someone else’s name. While this may work for the time being, it can be a problem if you ultimately file for bankruptcy as the court requires you to divulge asset transfers going back months, even years, prior to the filing of the bankruptcy petition. The court may even consider the transfer to be void, which could create a problem for the person in whose name you transferred the asset.

• Running up credit cards – a common reaction to money problems is to try and “find” more money. People, therefore, frequently turn to existing credit cards or apply for new ones, thinking they will pay the cards off when the financial crisis passes. If it doesn’t pass though, all that credit card debt could be a problem when you file for bankruptcy. Excessive and/or recent credit card debt may not be dischargeable, meaning you could be stuck paying all, or some, of it back even after your bankruptcy discharge.

• Losing assets – debtors may wait until after the loss of significant assets to finally consider bankruptcy. A car repossession or home foreclosure, for instance, may prompt you to consult a bankruptcy attorney. Doing so before the repossession or foreclosure, however, would likely have saved the asset.

• Paying creditors – paying your bills is certainly not a bad thing; however, if you cannot pay them, even trying to do so is simply throwing good money down the drain. If you turn around and file bankruptcy three months later, all the money you spent trying to pay your creditors is wasted.

If you struggle each month to pay your bills, yet continue to sink farther and farther in debt, now may be the time to consult with an experienced Kentucky bankruptcy attorney to ensure that you don’t make one of these mistakes.