If you are thinking about filing bankruptcy in Staten Island or New Jersey, it is important to know that there are things you should not do with your finances and assets before filing even if you don’t plan to file bankruptcy soon. Moving around assets, charging on credit cards, and selling property, can hurt your bankruptcy case, even if it was done a few years before you planned to file bankruptcy. You should always speak to a New Jersey or New York bankruptcy lawyer before considering bankruptcy. There are many instances where people file bankruptcy without an attorney and end up in a bad situation. Hiring a bankruptcy lawyer will make sure that your bankruptcy case goes smoothly and your creditors or trustee won’t give you any problems. Below we will discuss the top five things you should not do before filing bankruptcy.
1. Do Not Transfer any Money or Property Before Filing Bankruptcy
Many people who are considering filing for bankruptcy think that they should get their property out of their name so the Bankruptcy Court won’t take their assets. Transferring money to a relative’s bank account or transferring title out of your name into someone else’s name won’t protect you in Bankruptcy Court. The Bankruptcy Court has a look back period which allows the Trustee to look back a certain amount of years at transfers. Transferring property out of your name into someone else’s name can be looked at as fraud. Fraudulent transfers in Bankruptcy Court are grounds for having your bankruptcy dismissed and in worst-case scenarios, you can be criminally prosecuted for such actions. Some examples that constitute fraudulent transfers are:
- Taking your name off of a business
- Taking your name off of a vehicle, house, coop, condo
- Transferring a deed to someone
- Depositing money into someone else’s bank account
- Taking your name off of someone else’s bank account
Keep in mind that just because you file bankruptcy and have assets does not mean that the Bankruptcy Court will take your assets away. New York and New Jersey have exemptions that allow you to keep your property even though you are filing bankruptcy. Speaking with a good bankruptcy lawyer can help you determine if your assets will be protected when you file bankruptcy.
2. Do Not Pay Your Credit Cards Before Filing Bankruptcy
Many people before filing bankruptcy don’t want to fall behind on their credit card bills. Most people are under a misguided impression that if they keep paying their credit cards it will look better because they are doing the “right thing.” Unfortunately, even if you feel the right thing to do is pay your credit card bills, the Bankruptcy Court thinks otherwise. They do not want you to favor creditors and anything paid to your creditors within the last 90 days of filing can be grounds for a Trustee to try and get that money back from your creditors. Aside from not paying your credit cards, you should also:
- Not Pay Back any personal Loans
- Not Pay Back anyone who has lent you any money
3. Do Not Pay Back Family and Friends Before you File Bankruptcy
You may feel obligated that you need to pay back your friends and family who lent you money before you file bankruptcy. Unfortunately, you should never do this. If you pay back your friends and relatives before filing bankruptcy, the Trustee can sue your friends and family to get that money back.
4. Do Not Charge On Your Credit Cards
If your living expenses are high and you are living off your credit cards, you will need to stop charging before filing bankruptcy. Unless you absolutely need to use the cards for your basic living needs because you won’t be able to live, you should not use your credit cards before filing. Keep in mind, that anything charged on your credit cards within the 90 days before you file bankruptcy is technically not dischargeable. This means no going on a shopping spree right before filing bankruptcy. Aside from the aforementioned, you should also:
- Not take out any personal loans
- Not take out loans from your retirement such as your 401K, IRA, Pension, etc.
5. Do Not Start Any Lawsuits Without Disclosing it to the Bankruptcy Court
If you have a lawsuit for personal injury or other lawsuits you can bring against someone, the worst thing you can do is hide this when you file bankruptcy. Any lawsuits you can bring against someone and collect money is property of the bankruptcy estate. If you decide to hide any lawsuits or any claims on your bankruptcy petition, the insurance company will refuse to pay out your claim when the time comes that you are to get money because they will see you filed for bankruptcy. In New York and New Jersey, there are exemptions for personal injury. A good New York or New Jersey bankruptcy lawyer will help determine whether or not bankruptcy is the right option for you.
You should also keep in mind that any property or money you are going to get in the future is part of the bankruptcy estate and must be disclosed when you file bankruptcy.
Speak With a Staten Island Bankruptcy Lawyer and a New Jersey Bankruptcy Lawyer
If you are unsure if you qualify for bankruptcy and have done some of the things above it is important that you speak with a bankruptcy lawyer who can assess your situation and tell you what the right direction for you is.
Karra L. Kingston Esq. is a New York and New Jersey bankruptcy lawyer. She has helped many people get out of debt. Call today for a free consultation (973)-979-9078.