Filing for bankruptcy can be both an emotional and a legally-intensive process. If you have reached the point financially where filing for bankruptcy is the most sensible thing for your financial health and future, here are seven things you need to avoid prior to filing and while in the process–
Don’t Transfer Any Money
Some people think that one of the best ways to avoid having their assets taken from them is by changing the name on the title or transferring assets to another person. For example, you may change the name on a bank account or move money into a spouse’s account. However, this does not make the asset ineligible for consideration in bankruptcy court, and could even have penalties.
Don’t Make Big Financial Decisions
The more big financial moves you make, the more complicated your bankruptcy case will be. If you are thinking about filing for bankruptcy or have already filed, any large financial changes could disrupt and complicate the process. Such transfers should only be made after consulting your attorney.
Don’t Be Dishonest
One of the biggest mistakes a person can make when filing for bankruptcy is that of misrepresenting their assets or debts. Not only will you likely be found out, but you can face serious legal consequences for doing this.
Wait to File If You’re Expecting a Large Sum of Money in the Future
If you’re expecting to get a sum of money in the near future, such as a work bonus, income tax refund, or inheritance, you should possibly wait to file. This is for two reasons: first, you may be able to pay off your debt with the sum of money without having to file for bankruptcy; second, funds that you are expecting to get in the future, even if they are not currently in your possession, can be considered part of your bankruptcy estate.
Don’t Pay Your Creditors
If you are preparing to file bankruptcy, talk to your attorney before paying your creditors. Paying certain creditors for old debts can be considered preferential transfers, which are sometimes avoidable.
Don’t Use Credit Cards
The use of credit cards is probably one of the primary reasons you are facing debt. If you want to escape this debt, it is strongly recommended that you stop using your credit cards and use cash to make purchases instead.
Don’t Attempt to Represent Yourself
Finally, don’t attempt to represent yourself in a bankruptcy case. Filing for bankruptcy is a very complex legal process; even knowing which type of bankruptcy to file for can be complicated. When you work with a skilled bankruptcy lawyer, you improve your chances of understanding the most essential elements of the process and moving through the bankruptcy process as hiccup-free as possible.
At the law office of the Telpner Peterson Law Firm, LLC, our Council Bluffs bankruptcy lawyers can help. Call us today for answers to any of your bankruptcy questions.