Bankruptcy can offer individuals and small-business owners a much-needed fresh start. Chapter 13 bankruptcy is one strategy that can help you restructure your debts and create a repayment plan that could last three to five years.
For small-business owners, Chapter 13 can provide an opportunity to keep your business operating while restructuring your personal debts. However, tackling the complexities of bankruptcy law can be challenging.
Steer clear of these actions
Pursuing Chapter 13 bankruptcy could help you bounce back from a financial hole and rebuild your credit score. You should avoid these behaviors in the middle of a filing:
- Failing to disclose assets and debts: You must provide a complete picture of your financial situation, including all property, vehicles, bank accounts, debts, and potential inheritances or legal claims.
- Missing deadlines or payments: Adhere to court-imposed deadlines, attend all scheduled hearings and meetings, and make your plan payments on time.
- Misunderstanding the means test: Ensure you accurately calculate and report your income according to the bankruptcy means test requirements.
- Accumulating new debt during bankruptcy: Avoid taking on new debt without court approval, as this can jeopardize your case.
Avoiding these common missteps can increase your chances of a successful Chapter 13 bankruptcy filing. Remember, these actions can have serious consequences, potentially leading to case dismissal or other legal issues.
Navigating bankruptcy requires attention to detail and a thorough understanding of the process. This strategy can offer wage earners and small-business owners a path to debt relief. By steering clear of these mistakes, you can work toward achieving the fresh financial start you need.