Difficult economic times have left many consumers struggling with debt that they can’t ever seem to pay back. In some cases, filing Chapter 7 or Chapter 13 bankruptcy in Oklahoma may be the best course of action under these circumstances, as either option can offer consumers relief from overwhelming debt. With the help of our experienced bankruptcy lawyers at Oklahoma Legal Center, consumers can learn everything there is to know about filing bankruptcy in Oklahoma, as well as what mistakes they should avoid in the process. The following are the top six mistakes consumers should avoid when filing bankruptcy in Oklahoma.
Running up credit cards
Once you have made the decision to file bankruptcy in Oklahoma, stop using your credit cards. Charges on your credit card in excess of $500.00 made within 90 days of filing bankruptcy are considered non-dischargeable, which means you will still be responsible for the debt. Cash advances of more than $750.00 within 70 days of filing are also presumed to be non-dischargeable. Filing bankruptcy can be a fresh start for you financially, but making the mistake of continuing to use your credit cards can jeopardize this second chance.
Transferring property out of your name
It’s not uncommon to try to protect your property when filing bankruptcy, and some people think they can prevent their property from being taken away by simply giving it away or selling it to a family member or friend. The assumption is that after the bankruptcy is over, they will get their property back. This action is actually known as fraudulent conveyance in bankruptcy, and a bankruptcy trustee has the authority to undo any transfers of this kind going back as far as four years before the date you filed bankruptcy.
Repaying family members over creditors
When you decide to file for bankruptcy in Oklahoma, bankruptcy laws require you to treat family members like you would any other creditor. This means that if you owe money both to creditors and to your parents prior to filing bankruptcy, and you make a little bit of money to pay back some debt, you can’t choose to pay back your parents instead of other creditors. Under these circumstances, no special favors are allowed for relatives. If you do make this mistake within one year of filing bankruptcy, the trustee assigned to your case can force your relatives to give up the money.
Taking out a line of credit or second mortgage to pay off debt
It’s not a good idea to take out a home equity line of credit or a second mortgage in order to pay off unsecured debt. When consumers make this mistake, they aren’t actually getting rid of their debt, they are just moving it around. It may seem like a good idea, because now your credit cards are paid off, but the debt is still there. In fact, you’ve actually turned general unsecured debt into debt secured by your home, and now your house is at risk. Now if something bad happens and you are unable to pay this new debt, you could end up losing your home.
Liquidating your retirement account
Under similar circumstances, many people choose to raid their retirement accounts in order to pay off their debt. Unfortunately, these people often continue to struggle with debt and many end up filing bankruptcy anyway, except now they no longer have their retirement accounts as security for the future. Had they just filed bankruptcy in the beginning, they would still have their nest egg, as retirement accounts are typically protected in bankruptcy.
Failing to appear at court
If you are sued by a creditor or bill collector, you must either file a written response or appear in court. Make sure you do one or the other; otherwise, the person who sued you will win by default and then they can take serious action against you, often in the form of filing liens on your property or garnishing your paycheck. Filing bankruptcy will stop this collection activity, but the bankruptcy must actually be filed prior to your deadline for answering the lawsuit or court hearing.
Legal Help for Filing Bankruptcy in Oklahoma
Filing bankruptcy can be a confusing, emotional and frustrating process, especially if you’re not entirely sure how to go about ridding yourself of debt and putting an end to all those collection calls. At Oklahoma Legal Center, our bankruptcy attorneys are familiar with Oklahoma bankruptcy laws and can help consumers choose the best type of bankruptcy for their financial situation. Our law firm is based in Oklahoma City and our lawyers are experienced in guiding debtors through the process of filing bankruptcy and getting a fresh start in life. If you are considering filing bankruptcy in Oklahoma, contact our bankruptcy attorneys at Oklahoma Legal Center today and begin the process of relieving yourself of overwhelming debt.