Debts can be of two types, the secured ones, and the unsecured ones. Normally, any person would have a mixture of both these types of debts. The home loans, mortgage loans, car loans, etc comprise the secured loans whereas the credit card dues and personal loans make up the unsecured portion. Naturally, the latter category is risky from the bank’s point of view. Hence, the banks charge more interest on such loans. Under normal circumstances, you might be servicing all your loans regularly. In the case of loss of the job or other unforeseen circumstances, you may lose your source of income. This can cause defaults to occur thereby impairing your credit history as well. You might be in a position to service the secured loans but the unsecured loans could take a hit. Filing a Chapter 13 bankruptcy Florida litigation petition is one way to save your properties from going down under the hammer.
Your bankruptcy advocate is the best person to guide you about the precautions you should take under such circumstances. He can guide you on what to do and more importantly on what not to do. The second aspect is very important as any violation of this aspect can have a direct bearing on your bankruptcy proceedings. Let us now see the things one should never do while filing a bankruptcy litigation petition.
In addition to the debts you owe to the bank, you may have some personal debts towards your family or friends. There would be a temptation to pay them off. The advocates are very clear when they say that you should never indulge in such activities. This can jeopardize your bankruptcy petition.
Transferring property to a relative is not advisable at all without consulting a lawyer.
The bankruptcy petition freezes your liabilities towards the bank from the date of filing your petition. Hence, you should not increase your credit card dues after filing the petition. If you do so earlier, there should not be an issue. However, in case you incur a fresh debt subsequent to your date of the petition, you should know that the petition does not cover this liability.
Similarly, you should not reduce your liabilities as well as make a part payment of your car loan or clear the entire loan is not advisable without consulting the advocate.
The tax returns are the most important documents. You should ensure to file the returns. You should do so even if you do not have a tax liability or do not have money to pay your taxes as well. You can show them as payable on the returns but filing them is compulsory.
Many people like short selling their house to clear of their liabilities. There could be unforeseen tax liabilities. You might not know. The Court cannot discharge such liabilities arising out of short selling your house.
One should ensure to follow these steps perfectly. The bankruptcy advocate is available to invoke this Chapter 13 and help you to restructure your loan thereby giving you ample breathing space.