5 Mistakes to Avoid in Filing a Bankruptcy

  1. You can and will lose what little property you have when you file bankruptcy if you are not careful. Most common assets lost in filing bankruptcy include the following:
    1. Coming year tax refund
    2. Bank account balances on the day of filing
    3. Extra vehicle or boat or ATV
    4. Rental property or other real estate other than your actual residence
    5. Claim for personal injury or medical malpractice
    6. Assets and inventory in a business
  2. Most income taxes can be discharged in a bankruptcy if over three (3) years old – but the three years is calculated from April 15 in the year in which they were due, not when actually filed. If no tax return was filed and the IRS assessed the amount a slightly different time frame may apply.
  3. If you have only lived in Kansas for three years or less, you may not receive the benefit of Kansas’ generous property exemptions. Talk with your attorney.
  4. If you file too soon after losing a higher paying job, you may be forced into a chapter 13 (monthly payment) plan, when just a little patience could allow you to file a chapter 7 liquidation case.
  5. Many creditors will threaten to repossess a car if you do not reaffirm their debt. Rarely will a creditor reposses if the monthly payments are being made, and in any case, if you are upside down on the vehicle it is never advisable to reaffirm the loan.

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