Always remember; when you are filing for bankruptcy, there are certain things that you should always consider for proper proceeding. Here are some of the important factors that are crucial for a bankruptcy case:
If you have unfilled tax returns, then you are not eligible to file a bankruptcy case because unfilled tax returns may cause problems in bankruptcy. Usually, you need to provide your lawyer with the last 2 to 3 years of your tax returns before filing for bankruptcy. If you have unfilled tax returns outstanding at the time of filing for bankruptcy, you need to file all overdue tax return in one week before your bankruptcy hearing.
According to Chapter 7 Bankruptcy, taxes will not be discharged or wiped out. But there are some exception cases like if taxes are more than three years old and are filed in timely manner. It is better to frame a repayment plan with the IRS or local tax authorities before filing for a Chapter 7 Bankruptcy.
According to Chapter 13 Bankruptcy, taxes that are not seen as an unsecured dischargeable debt are required to be paid in the monthly payment plan.
Child support payments or any kind of child support arrears are seen as debt that is not eligible for discharge in bankruptcy. The recent revision in the bankruptcy laws requires the trustee to check any domestic support requirements and provide any information to the recipient. The Chapter 13 bankruptcy requires all post petition domestic debts to be current.
It is not true that owning a business makes you ineligible for bankruptcy. Sometimes, self employment can make a tough case. Without proper records of income, self employment can be a difficult case in bankruptcy. Important paperwork like the Statement of Financial Affairs, the statement of profit and loss and a business questionnaire are very important for a self employed to file for bankruptcy.
Student loans are also considered to be dischargeable in a bankruptcy. Because of some debt limits, student loans can also disqualify you from many types of bankruptcy and can force a Chapter 13 payback Plan harder to fund.
In this case, the trustee can get a chance to pay back the creditors and turn the case into a more profitable one. So, you always have to disclose these situations, as hiding them may land you in worse conditions. Your attorney will try to determine how much of these assets can be protected by the bankruptcy exclusions.
Large payments to creditors when filing bankruptcy
Do not make large payments to a particular creditor before filing for bankruptcy. This type of case is called a preferential payment or Preference. In this case, showing preference to one creditor over other may land you in trouble.
If you have transferred assets, taken cash advances or ran up credit cards before filing for bankruptcy, you are bound to face problems. If the court thinks that you have lied about your assets, then you are liable for your debts and your discharge may be denied. In worst cases, those who hide their assets face criminal charges.
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