The bankruptcy process in Montana as with many states across America was designed as be a last resort option to avoid financially disastrous situations. It is intended for creditors to be able to collect at least a portion of their debt , and legally exempt the remainder of their obligation. The bankruptcy process can be difficult process in terms of legal, financial as well as emotionally draining. A reputable lawyer located in Montana is able to help you navigate the bankruptcy procedure. Here are a few common mistakes to avoid you are going through bankruptcy:
The Wrong Type of bankruptcy
It is not one legal procedure. It’s divided into various types of process, called “Chapters,” named after their location within Chapter 7 of the US Bankruptcy Code. There are two types of bankruptcy: Chapter 7 and Chapter 13. Chapter 7 bankruptcy involves liquidation of debtor’s assets in order in order to repay some debts before bankruptcy courts discharging remaining amount owed. Chapter 13 bankruptcy involves reorganization of the debts. The debtor who is who is in Chapter 13 bankruptcy must come the plan of how to pay back his or her or their debtors prior to when the bankruptcy court discharges the remainder.
Selecting the right kind of bankruptcy is vital. Making a filing for Chapter 13 bankruptcy when you plan to liquidate your assets could cost you time and energy. The filing of Chapter 7 bankruptcy when Chapter 13 is advantageous could result in a unnecessary loss of your assets. It is recommended to consult an attorney for bankruptcy before making a decision on the type of bankruptcy you wish to choose to file.
The process of bankruptcy is legal that can free any business or person from certain legal obligations. The bankruptcy process offers an opportunity to get a “second opportunity,” however it is only a privilege and not the right. The debtor is expected to be honest when presenting their assets. One of the most costly mistakes that debtors make in bankruptcy is concealing assets or not disclosing that an asset exists. In the absence of a legally-binding disclosure can lead to rejection or denial of bankruptcy, or an annulment of the bankruptcy petition.
The Right Way to Pay Debt Prior to Filing for Bankruptcy
One of the most common mistakes that debtors commit is to go to the mall prior to filing bankruptcy. This is a common temptation when you’re in the process of filing for bankruptcy so why not simply pay the cost and get it out of the way? However, bankruptcy is an open disclosure of all the financial information you have. The bankruptcy court as well as creditors are aware if the debtor is into a major expenditure prior to making bankruptcy. When the creditors and court recognize what’s going on and take action, they could punish the debtor with a number of different ways. The court could decide to dismiss the bankruptcy petition completely. The creditors may ask for the newly incurred debt to be declared non-dischargeable. In some cases, the debtor could be prosecuted with fraud. Bottom line – don’t do it!
Liquidating Retirement Accounts
Certain debtors might try to market their assets prior to filing bankruptcy, which could include liquidating their retirement funds. Most states let debtors keep some items and properties even after bankruptcy. The aim for bankruptcy would be to repay back all the money that is it is possible, while offering debtors second opportunity.
Both the state and federal governments want to make someone who is in debt completely unemployed. Therefore they are usually able to hold certain amounts of value in their homes as well as their retirement funds, and also retain certain personal possessions, like bibles, guns or other valuables that the state could consider essential to preserve in the event of having to sell all the other stuff. It’s best to talk to an attorney for bankruptcy prior to deciding the assets you will sell before and during bankruptcy.
Do I require an Bankruptcy lawyer to file a bankruptcy case in Montana?
A bankruptcy is a significant personal and financial decision. Although it may be advantageous but there are likely to have negative effects which could affect the credit score and possibly reputation. When you consult an experienced Montana bankruptcy attorney it is possible to reap benefits that exceed the cost, however only a lawyer will be able to provide the necessary legal counsel to gain maximum benefit from the bankruptcy process.