Things You Don’t Want To Do Before Your Bankruptcy
When it comes to bankruptcy, it can seem like there are a lot of things that you shouldn’t do before you file for bankruptcy. We have written in the past about many of them, and the consequences of each. But it may be helpful to have a short checklist of the things that you should avoid doing before you file for bankruptcy.
You should keep in mind that some of these things may not be so bad depending on what chapter of bankruptcy you will be filing. But unless and until you consult with a bankruptcy attorney, you may not have any idea what chapter of bankruptcy is right for you, so as a general guideline, avoid doing any of the following:
- Charging up credit cards – outside of absolutely necessary living expenses, like gas or food or utilities, do not charge your credit cards
- Take anything out of your name – this includes both selling property, as well as re-titling bank accounts, businesses or other financial accounts
- Taking disbursements or one-time payments– Do you have a bonus, one-time payout or a commission coming to you? It may be best to wait, as these can increase your average monthly income to a level that isn’t really representative of your actual income.
- Filing any lawsuit – Your lawsuit is an asset that can be taken by the bankruptcy court. You could lose the ability to bring the case, or collect any winnings in your lawsuit. If you can help it, wait to file your case.
- Buying luxury goods – Even if not charged on credit, avoid buying any luxury item. Aside from the fact that those items may not be exempt in your bankruptcy, purchases of luxury goods can make it look like you’re abusing the bankruptcy system
- Giving or selling property to anyone—especially friends or family – “Selling” your valuable instrument to mom for $1 is fraud, and a court could sue mom to get the property back. Unless you absolutely need to sell something, and you’re getting full value back in the sale, try to avoid selling anything you own before you file.
- Be sloppy with paperwork – Bankruptcy paperwork requires a lot of detail. It’s easy to cut corners. Don’t. Do your homework, and disclose every item, asset, and debt that you own. Taking time now can avoid costly and time consuming problems later on.
- Pay some creditors – Paying some creditors and not others can make it look like you’re giving one creditor an advantage over another. Just paying back a single creditor “to be nice,” can make your bankruptcy much more difficult. Only pay the creditors that you normally would, and have been paying, in the ordinary course of your life thus far.
Don’t guess or take chances before you file your bankruptcy. Call the West Palm Beach bankruptcy lawyers at Kelley Kaplan & Eller at 561-264-6850 for help today in doing it the right way the first time.