What Can Go Wrong in Your Bankruptcy Case

There are literally hundreds of things that can go wrong in a Chapter 7 bankruptcy.  Here are just a few areas that can cause you issues in your case if your case has not been reviewed and prepared properly:

Not Listing All of Your Assets in Bankruptcy

Bankruptcy documents are filed under penalty of perjury and require that you list every asset you own.  Even if you don’t control the asset, if your name is on it then you have an interest in it.  Here are some examples:

  • Car accident? In the bankruptcy world, you own the asset when the event occurs and not when the cash finally reaches you.
  • Pending inheritance? If the death or divorce occurs within 180 days after the bankruptcy is filed, the asset is considered owned as of the filing date.
  • Your parents put you on their deed to their home. That means that you have an asset in your interest in the home which the trustee could liquidate.
  • Your kid’s car is in your name. That is also an asset that needs to be listed.

Transfers Before You File For Bankruptcy

Giving away stuff before filing a bankruptcy case looks REALLY bad. If you didn’t get fair consideration for the exchange, then it’s considered fraudulent to your creditors. The transferee (person who received asset) can be sued for as long as your state’s law allows, with the recovery redistributed to all creditors proportionally. In Georgia creditors can back 4 years and in some cases even 10 years so review any transfers with your attorney.

Bankruptcy Means Test

The means test is the most annoying part of the bankruptcy paperwork The means test is how Congress has you figure out whether you have the means to pay a meaningful amount of your debt. There are legal tricks that aren’t obvious, and a mistake in the income or expense figures you use can put you in an unnecessary five-very-long-year chapter 13 case. Make sure you review this with your attorney very closely.

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