Don't Make These Mistakes Before Filing for Bankruptcy
We want to set you up for success so that your bankruptcy case runs smoothly from start to finish. Therefore, we want you to know that there are certain “no-no's” that you must be aware of before you file for bankruptcy.
There are some common mistakes that people have made in the past before filing for bankruptcy. These mistakes have messed up their cases, and these people didn't get the results that they had hoped to get. We most certainly don't want this to happen to you. We want you to easily obtain your discharge without any unexpected problems. We want you to have a happy bankruptcy, so that you can wipe out your bills, keep your property, honorably obtain your legal discharge, and move forward on the road towards a much brighter financial future.
Therefore, please be aware of the following important information:
- DON'T RUN UP YOUR CREDIT CARD DEBT BEFORE YOU FILE FOR BANKRUPTCY.
Once you have made a decision to file for bankruptcy, stop using your credit cards. The law says that consumer debts for luxury goods and services to one creditor of more than $500 within 90 days before you file for bankruptcy might not be wiped out. Therefore, you might have to repay these specific debts even though you file for bankruptcy. Furthermore, cash advances of more than $750 within 70 days before you file for bankruptcy might not be wiped out, and you might have to pay those specific debts even though you have filed for bankruptcy.
We want your bankruptcy to be totally successful. Therefore, please make sure to let us know of any recent credit card debt, or other debts that you have incurred within the last 90 day period before filing for bankruptcy. We know how to handle these situations, and we will guide you so that we can achieve the best results for you, wipe out your debts, make sure you keep your property, and honorably obtain a legal discharge.
- DON'T REPAY DEBTS THAT YOU OWE TO A FAMILY MEMBER OR FRIEND BEFORE FILING FOR BANKRUPCTY.
You are not permitted to treat debts that you owe to family and/or friends differently from the way you treat debts that you owe to credit card companies and other unsecured creditors. Believe it or not, the bankruptcy Trustee could ask a family member or friend to return the money that you have repaid them within 1 year of filing for bankruptcy. If you have made any payments on debts that you owe to family members or friends, please let us know, and we will give you the appropriate advice so that we can get you the best legal results.
- IT IS USUALLY NOT A GOOD IDEA TO START WITHDRAWING MONEY FROM YOUR RETIREMENT ACCOUNTS.
When you file for bankruptcy, retirement accounts are usually completely protected. As a simple example, you could have $300,000 in your retirement account, and you might owe $50,000 in credit card debt. If you file a Chapter 7, you could totally wipe out your debt and keep all of the money in your retirement account. Many people have made the mistake of taking money out of their retirement accounts to try to pay their bills before filing for bankruptcy, and this is usually not a good idea.
If you have withdrawn any money from your retirement accounts before filing for bankruptcy, please let us know, and we will review with you what solutions are available.
- DON'T TRANSFER PROPERTY OUT OF YOUR NAME.
Sometimes, people who do not fully understand the bankruptcy laws, transfer, sell or give away some of their property. By doing this they hope their creditors would never be able to gain any rights to property they own. The laws are very strict in this area, and the bankruptcy Trustee can actually force the person to whom you transferred the property to return the property to the Trustee. The theory behind all of this is that the property could be used to pay back some of your debts. Transfers of property before you file for bankruptcy could be a very bad mistake. Make sure that you tell us about any transfers of property that you have made in the last 4 years before you file for bankruptcy.
- MAKE SURE TO TELL US THE TRUTH ABOUT EVERYTHING AND MAKE FULL AND COMPLETE DISCLOSURE TO YOUR LAWYERS.
We will go through a series of questions with you concerning your income, your expenses, and all the property that you own. You will be signing documents under penalty of perjury. Make sure that the information you provide in your bankruptcy papers is totally true and correct. You will be going to a meeting with us and the bankruptcy Trustee, and you will be sworn in, under penalty of perjury, to truthfully answer all questions. You are going to be asked about your income, your assets, your expenses, your bills, and about any property transfers you have made before filing for bankruptcy. You need to be totally truthful with us in answering these questions, so that we can properly prepare your case and give you the best possible legal advice.
Once we know all of the information, we might advise you that bankruptcy is not the best solution for you, and we will advise you about other solutions that might work out better for you. We can only give you the best advice if we know the truth about everything. If you don't truthfully disclose all information, the Bankruptcy Court could deny you the right to wipe out your bills, and there could be other serious penalties and consequences. Obviously, we don't want that to happen to any of our clients, so make sure that you always give us complete, accurate, and totally truthful information. When it comes to filing bankruptcy, total and complete honesty is definitely the best policy.