Things to Avoid Doing Before You File BankruptcyThursday, October 15th, 2020, 9:01 am
If you’re thinking about filing for bankruptcy, there are a number of things you should not do in the coming months. Making these mistakes can make your bankruptcy case more complicated, even if you do them without any malicious intent.
Don’t Give Away Property or Large Amounts of Money
The bankruptcy court doesn’t just look at what assets you have now—they also look at what assets you have recently had. Some people have tried to hide assets from the court by transferring them to others, but this doesn’t work. Even if you innocently do something such as transfer a significant amount of money to one of your children or deed property to someone, the court may still see it as an attempt to hide assets.
Don’t Rack Up a Large Amount of Debt
Don’t make the mistake of thinking bankruptcy is just going to wipe away all your debts so you can charge up anything you want. Again, the court will look at your recent transactions. If they see that you’ve taken a very expensive vacation weeks or even a few months before declaring bankruptcy, they will likely see it as an attempt at fraud. Only use your credit cards for necessities if you must. It’s best to stop using them completely, and do not open any new lines of credit.
Don’t Pay Creditors More Than You Have To
It might seem logical to try to pay off as many debts as you can before bankruptcy, but you have to be very careful here. Paying off one credit card before bankruptcy may be seen as making a preferential transfer. You can make your regular payments, but you can’t make any unusually large payments to one creditor while you stop paying others. That’s because doing so could allow that creditor to receive a bigger share of the split than other creditors. These preferential payments can result in the creditor being sued.
Avoid Trying to Do it Yourself
Bankruptcy is not something you should try to DIY. You need a legal expert on your side because the process does include some complicated rules and unexpected pitfalls. With the firm of Michael F. Kanzer & Associates on your side, your bankruptcy will be handled correctly and as quickly as possible. Contact us today to schedule your free consultation.