Here are the top 10 mistakes you don't want to make

1.       Missing the Hearing or failure to file the second Debtor Education Certificate.    You will have a hearing about 4-6  weeks after you file at which time your Debtor Education is due.  If you do not attend your hearing of file the second Debtor Education Certificate, your case may be dismissed or you will fail to get your discharge. You will have a credit record of filing bankruptcy but you still owe the debts.  You should also double check that your attorney filed your certificate.  Just because you took the 2nd course does not mean he got it or filed it.  You must bring photo ID & proof of social security number to your hearing or you wont be admitted to the building.

2.       Transferring Assets or Paying off Debts  Assets transferred in anticipation of filing bankruptcy can be taken by the trustee.  The exemptions are now so large that if you had kept it normally you would have saved it by transferring it guarantees losing it.   

3.       Check your mortgage and car title.     Were these properly recorded.  If they were not properly recorded you may have a free car.  Or if the first mortgage is for as much or more than the house is worth you may be able to eliminate your second mortgage by filing a Chapter 13!  

4.       Filing when you have a substantial Tax Refund pending or a large amount in the bank account.    You have “exemptions” that allow you to keep property.   Tax refunds and money in your bank account are assets that can be used to pay creditors.   Although the exemptions in Kentucky allow you to keep a lot you can have too much so spend down bank accounts and get your refund early in the year before filing if you refund is over 3,000.  

5.       If you are filing a Chapter 13 your payments start as soon as you file.   When you go to court your 1^st payment will be due.   Failing to make the payments will get your case dismissed.      Pay the Chapter 13 payments on time and your mortgage if it is being paid outside the plan.   Payments to the mortgage company should be send in by certified mail.

6.       Getting a Second Mortgage or cashing in your retirement to pay debts instead of filing Bankruptcy.  Cashing in your retirement often means that you now don’t have a retirement and you still have to file.  Similar if you get a second mortgage,  you still are eventually going to file when income doesn’t equal outgo. 

7.       Charging on credit cards just before Filing  If you have charges on your credit card  within three months of filing you may have to pay that debt anyway. Especially bad are luxury item purchases and cash withdrawls.   You shouldn’t have any charges of over 750 within 90 days before filing. 

8.       Reaffirming Debt  Often redemption is much better than redeeming a debt.  If you don’t understand the difference then you need to learn.   The average person that redeems a debt save 8,000.00 dollars on their car.   If you cant afford items and have to file bankruptcy you should be especially careful not to go back into debt.   Reaffirming means that the bank or creditor can sue you for the diffencency if they repo the car or foreclose the home.   Never reaffirm a loan you cant afford.   There are other options.  

9.       Failing to list all Creditors  If you do not list a creditor, the debt may not be discharged. You should list all creditors, even if you have a co-debtor or intend to repay the debt.   Listing the debt shows the debt as an expense.   If you don’t list the debt then you may be forced into repaying all your debts in a Chapter 13 because you have money left over to pay your debts.

10.   Filing too early or too late.  See your attorney early.   Planning and Timing your bankruptcy is everything.   Filing too late means that you may lose your home, have your wages garnished, or lose other property,   Filing too early may mean that certain taxes are not old enough to be bankrupted. 

Kentucky Bankruptcy Information  Kentucky Bankruptcy Chapter 7  

Indiana Chapter 13  Louisville Bankruptcy FAQ