For a lot of people these days, filing for bankruptcy Chapter 13 is the only option to get their financial future back on track – even if it doesn’t look like an attractive option at first.

A form of personal bankruptcy that allows individuals to reorganize their financial lives (with the help of the US government) while repaying down the debt that they owe during a three to five-year time period, this form of bankruptcy can be incredibly advantageous for folks that want to “reboot” their finances and their credit.

At the same time, this is always going to be a process that involves the United States federal government, and that means that you have to make sure that you NEVER make any mistakes during the bankruptcy Chapter 13 filing process.

Obviously, you’ll want to work with the best bankruptcy experts you can (bankruptcy lawyers, financial advisers, and credit counselors can all help), but as a general rule you’ll also want to do as much research about this process as you can to give yourself a foundation education in bankruptcy.

To help you with that, we’ve put together a quick list of major bankruptcy Chapter 13 mistakes you don’t ever want to make.

Let’s dig right in!

DON’T wait too long to get your credit counseling certificate

If you are going to file under Chapter 13 bankruptcy protection you have to go through a credit counseling course that has a government certification. Don’t ever put this process off too long or it’s going to cause a world of headache and hassle and no small amount of delays.

DON’T pay down your debts to friends and family members first

It might seem like a good idea to clear the debts that you have with your friends and family members first, but once the government steps in their going to want to make sure that all of your assets and income is equally distributed among ALL of your creditors.

If they find out that you have paid off your debts with friends and family first they might take action to recover a portion of that funds from those individuals to redistribute them among you are other creditors.

Don’t put those closest to you through that headache.

DON’T take on any extra debt (ANY extra debt)

It would be a major mistake to take on any extra debt when you are under the bankruptcy Chapter 13 protections. It isn’t going to be fair to you because of the potential for a slip up, it isn’t going to be fair to your creditors, and it’s going to make your life a lot more challenging – especially if you slide behind the eight ball with this new debt.

DON’T EVER try to hide assets from the government

Every single year some people filing for bankruptcy Chapter 13 try and “hide” assets or income from the United States government, and every single year ALL of those people pay the ultimate price. When it comes to fooling around with the US government you are always playing with fire.

Don’t ever try and transfer assets out of your name, hide income that you don’t want redistributed, or lie about your financial situation. The government investigators will inevitably find out and you’ll find yourself in a world of trouble.