There are several common mistakes that people make while filing for bankruptcy. Filing for bankruptcy in Oklahoma City can provide much-needed relief for individuals and businesses struggling with overwhelming debt. Whether you are filing for Chapter 7 liquidation, Chapter 13 reorganization, or Chapter 11 business restructuring, avoiding common pitfalls can help ensure a smoother process and better financial outcome.
1. Failing to Consider All Debt Relief Options
One of the biggest mistakes people make is rushing into bankruptcy without exploring other debt relief options. Bankruptcy may not always be the best choice, and alternatives such as:
- Debt negotiation with creditors
- Loan modifications
- Debt consolidation programs
These options may provide relief without the long-term consequences of a bankruptcy filing.
2. Not Being Honest or Disclosing All Assets and Debts
When filing for bankruptcy, you must fully disclose all financial information, including:
- All assets (real estate, bank accounts, vehicles, valuable possessions)
- All debts (credit cards, medical bills, personal loans, taxes)
- Any recent transactions, such as large purchases or transfers of money
Attempting to hide assets, omit debts, or transfer property before filing is considered fraud and could result in dismissal of your case, loss of discharge eligibility, or even criminal charges.
3. Misusing Credit Before Filing
Many individuals believe they can max out credit cards or take on new debt right before filing for bankruptcy and have it discharged. This is a serious mistake because:
- Any large purchases or cash advances made within 90 days of filing may be flagged as fraudulent.
- The bankruptcy court may require you to repay certain debts instead of discharging them.
- Creditors can object to your bankruptcy discharge, leaving you responsible for certain debts.
If you are considering bankruptcy, avoid taking on new debt in the months leading up to your filing.
4. Choosing the Wrong Type of Bankruptcy
Selecting the right chapter of bankruptcy is crucial to achieving your financial goals:
- Chapter 7: Best for individuals and businesses with little to no income who need a fresh start through liquidation.
- Chapter 11: Typically used by businesses to restructure debts while continuing operations.
- Chapter 13: Ideal for those who have a steady income and want to reorganize debts into a manageable repayment plan over 3–5 years.
Filing under the wrong chapter could result in case dismissal, asset loss, or unnecessary repayment obligations. Consulting with a bankruptcy attorney can help you determine which option is best for your situation.
5. Missing Court Requirements and Deadlines
Once you file for bankruptcy, you must comply with requirements and deadlines set by the bankruptcy court, such as:
- Attending the 341 meeting of creditors
- Completing a credit counseling course before filing
- Completing a debtor education course before discharge
Failure to meet these requirements can result in case dismissal, meaning you will not receive debt relief.
Oklahoma City Bankruptcy Attorneys
Filing for bankruptcy in Oklahoma City can be a lifeline for those drowning in debt, but making mistakes during the process can lead to case dismissal, loss of assets, or legal consequences. By avoiding these common errors—such as hiding assets, maxing out credit cards, or filing without an attorney—you can improve your chances of a successful bankruptcy outcome.
If you are considering bankruptcy, our bankruptcy team at Kania Law – OKC Attorneys can help. Call us today at 405-367-8710 or ask a question online.
