TOP 5 THINGS NOT TO DO BEFORE FILING BANKRUPTCY

 

1.     DON’T continue to use credit.  That means stop using your credit cards.  Stop getting payday loans or other personal loans.  Stop all credit entirely.  Recent debt before filing for bankruptcy protection can limit your ability to wipe out those debts.  In addition, the creditors may be successful in proving you are not filing bankruptcy in good faith.  If that happens, you may not be able to receive bankruptcy protection at all.  

2.     DON’T pay back friends and family members money you may owe them.  Doing this may unnecessarily drag those people into your bankruptcy proceeding.  All repayments of loans of this type must be reported when you file.  The Bankruptcy Trustee may either require your friends or family members to file certain paperwork with them or, worse, they can even sue them to recover the money.

3.     DON’T let your property get taken.  After a house is foreclosed or a car is repossessed, there is nothing a bankruptcy will do to get it back.  Seek legal protection BEFORE that happens.

4.     DON’T transfer property out of your name for the sole purpose of keeping it out of the hands of the creditors.  All transfers of property prior to the bankruptcy filing have to be reported and if the Trustee thinks you may have tried something sneaky to save your property, they could turn the matter over to the U.S. Attorney to prosecute.  Yes, prosecute. 

5.     DON’T hide things from me.  Too many people think that if I don’t know about real estate or income they may have, that they are actually helping their case.  That couldn’t be further from the truth.  First, if I don’t know about property, I will not take the necessary steps to protect it.  In addition, if the Trustee thinks you hid property on purpose, you may lose it anyway.  Second, I’m not judging you on where your income is coming from and I don’t report that income to the government.  If you don’t give me accurate income figures, I may not give you accurate advice.

 

For the Top 5 Things You SHOULD Do Before Filing Bankruptcy click here.

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