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5 Mistakes to Avoid if You are Filing Bankruptcy

Posted on in Bankruptcy

Illinois bankruptcy lawyersLike most things in life, bankruptcy can be either a negative thing or a positive thing - it all depends on how you handle it. There are certain things that you can and cannot do when filing for bankruptcy. Violating bankruptcy laws can result in criminal charges, meaning you could be subject to up to five years in jail and $500,000 in fines. If you want to make your bankruptcy process a good one, be sure to avoid making these costly mistakes:

1. Lying or Attempting to Hide Assets

The number one thing you should not do when filing for bankruptcy is lying about factors that could make or break your ability to declare bankruptcy. When reporting your assets, income, or debts, you should be completely honest or you could face criminal charges and your bankruptcy case will be dismissed. To file for a Chapter 7 bankruptcy, you have to go through what is called a “means test” which examines financial records, income, expenses, and your debt to determine whether or not you qualify. Lying or hiding assets so you pass the means test is not good.

2. Increasing Your Credit Card Debt

This is another no-no when filing for bankruptcy. You may think that bankruptcy will relieve you from all of your credit card debt, but typically, credit card purchases that are made within 90 days of filing for bankruptcy are not included in the bankruptcy relief. This means that you will be responsible for paying your creditors that money.

3. Giving Assets to Friends or Family Members

Giving assets or money to friends or family members before you file for bankruptcy is a sign to judges that you are being dishonest with your assets. If you give money to friends or family members before filing, they may be required to pay that money back. You must be truthful when reporting assets or you could risk losing them.

4. Not Doing Your Research

Not all kinds of debt can be relieved by filing for bankruptcy. Types of debt that may not be covered by bankruptcy include:

  • Student loans;
  • Child support or alimony;
  • Tax debt; and
  • Restitution

5. Not Getting Help From an Orland Park Bankruptcy Lawyer

Understanding how the bankruptcy process works can be difficult and confusing, but with the help of an experienced Tinley Park bankruptcy attorney, you can have peace of mind knowing your finances are being handled by a professional. Bankruptcy can be a stressful and sometimes embarrassing process, but with proper action, you can walk out of the situation, happier and debt free. Get in touch with Anderson & Associates, P.C. to get started with your bankruptcy process. Call the office at 708-226-9904 to set up a consultation today.






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