Self-sabotage, even the most disciplined of us fall into it. But self-sabotage in your bankruptcy case can have long-term ramifications for the second chance that bankruptcy offers debtors. Below are five ways that debtors sabotage their bankruptcy case and by extension their financial future:
- Failing to go through the credit counseling requirements before filing bankruptcy. Failing to go through the credit counseling process could cause the bankruptcy trustee to dismiss your case.
- Failing to be honest on your bankruptcy forms. Debtors often leave off debts or creditors in an effort to keep some people out of the bankruptcy or to somehow manipulate the bankruptcy system. Failure to fill out all bankruptcy forms honestly can result in the dismissal of the case or worse. If the omission or untruthful statement is done in "bad faith" the debtor could face bankruptcy fraud charges.
- Attempting to hide assets or cash in bankruptcy can have far reaching legal consequences that include the dismissal of the bankruptcy case and charges of bankruptcy fraud. Even if a debtor is able to win a bankruptcy discharge, if it is discovered afterwards that the debtor hid assets that discharge can be rescinded and the debtor will have to repay their creditors.
- Failing to appear for the meeting of the creditors (341 meeting) or failing to produce documents requested by the bankruptcy trustee puts the debtor at risk for a dismissal of their case.
- Failing to continue a Chapter 13 bankruptcy repayment plan. While it is understandable that a debtor may run into financial difficulties over the course of 3 to 5 years while in Chapter 13 bankruptcy, simply stopping payment on a bankruptcy repayment plan is unacceptable. If a debtor simply stops payment or reduces the amount they pay without approval from the bankruptcy court their case could be dismissed.