If you are reading this you are probably contemplating whether or not Bankruptcy is the right decision for you. Here are some things that you should not do before filing for bankruptcy.
Top Things Not To Do Before Filing Bankruptcy
1. Do Not Charge on Your Credit Cards:
Prior to filing bankruptcy it is important to stop charging on your credit cards. Many people think they can charge on their credit cards and then file bankruptcy. This is false. If you knowingly charge on your credit cards with the intent to file bankruptcy then you are committing fraud. The bankruptcy court has a 90 day look back period. Thus, anything bought within the three months of filing bankruptcy can be deemed as fraudulent. Thus, the bankruptcy court will either make you return the items or pay for the items that you charged during that period.
2. Do Not Transfer Property:
Many times people who have assets want to file a Chapter 7 but can’t because they have too much equity and thus, may not be able to. In these circumstances it would sound great if you could just transfer the deed to your mom, dad or spouse. Or transfer the title to your car out of your name. Unfortunately, this is seen as fraud and can’t be done. This can be seen as a fraudulent transfer and the bankruptcy trustee can sue to get the property back in order to pay off your creditors. Moreover, even if you sell property for less then it’s worth this is still considered a fraudulent transfer. It’s best to not sell or transfer any property to anyone else before you file for bankruptcy.
3. Do Not Pay Friends or Relatives:
It is important to speak with an attorney before you file bankruptcy. However, it is extremely important to not pay any friends or relatives before filing bankruptcy. You may have a best friend who lent you money that you want to pay. Unfortunately, you can’t decide which “creditors” you want to pay and which creditors you do not want to pay. In this situation, the trustee can sue your friends or family to return the money.
4. Do Not Withdraw funds from any retirement Account:
It is important that you don’t take out huge chunks of money before filing bankruptcy. If you plan to take out money please make sure you speak to your bankruptcy attorney first.
5. Do not spend any money that you get from any lawsuit:
If you had a lawsuit and got money back it is important to speak with an experienced bankruptcy attorney before spending that money. Put it in a separate account and speak to your lawyer before using it.
Speak With A Bankruptcy Lawyer who can advice you on what you shouldn’t do before Filing Bankruptcy
Karra L. Kingston is an experienced bankruptcy attorney. Give her law office a call today to find out more about what options you may have.