Bankruptcy can be a powerful tool to get you out of financial hardship and promote your fresh start. But bankruptcy can be less effective if you do not prepare for your case with diligence and honesty. Here is a list of things to do to get the most out of your bankruptcy case.
- Don’t lie or withhold information from your bankruptcy attorney. For your attorney to represent you competently and to make sure that you get the full benefit of filing for bankruptcy, it is important that you share all information with your attorney. Information that you find embarrassing may not appear that way to your attorney, who likely has seen the same thing or similar things before.
- Don’t pull cash out of your retirement accounts to pay debt. Assets in qualified retirement accounts are exempt from creditor seizure. That money is yours and yours alone. Don’t convert your retirement savings to pay creditors.
- Stop making credit purchases; Stop using your credit card. Borrowing money with no expectation of repayment may be fraudulent and may prejudice your ability to discharge the debt incurred.
- Don’t pay off a credit card with the thought that you will be able to use it after you file. The credit card company you pay off will learn of your case and close the account. You will have achieved nothing but lost the money you used to pay off the card.
- Advise your attorney if you expect to receive a large tax refund in the near future. If you receive a tax refund after you file bankruptcy for tax periods that pre-date your case, the trustee will demand you turnover the refund to him for payment to your creditors. You will likely benefit by waiting to file after you receive, and spend wisely, the tax refund.
- Don’t repay loans to family or friends to avoid having to list them as creditors. Loan payments to family members within a year of the bankruptcy filing may be recovered by the trustee on the basis that your family members were inappropriately preferred to the benefit of your other creditors.
- Stop any automatic funds transfers for debt you expect to discharge in bankruptcy. You might as well burn a stack of cash if you continue to pay creditors whose claims will be discharged in your bankruptcy case.
- Don’t transfer money or property to family or friends to hide the asset from the trustee. This conduct is very much frowned upon and can lead to some adverse consequences. Bankruptcy is a wonderful tool that Congress has designed for HONEST debtors.
If you are falling behind on debt payments, you may want to consider ways to reduce debt or get rid of it entirely. Call or email for a free consultation to learn the full range of your options.
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We are a debt relief agency, we help people file for Bankruptcy under the Bankruptcy Code. This Blog is made available by the lawyer or law firm publisher for educational purposes only as well as to give you general information and a general understanding of the law, not to provide specific legal advice. By using this blog site you understand that there is no attorney-client relationship between you and the Blog publisher. The Blog should not be used as a substitute for competent legal advice from a licensed professional attorney in your state.