What To Avoid Before You File For Bankruptcy
The process of filing for bankruptcy usually involves research into the steps you will need to take in order to be eligible for bankruptcy, the documents you will need to provide, the schedules and forms you will need to fill out and file, and any financial courses or hearings that you will need to attend. While it is important to know about the things you must do prior to and during a bankruptcy case, it is also critical to learn about mistakes to avoid before you file for bankruptcy or during your bankruptcy case. Our West Palm Beach bankruptcy attorneys have tips concerning actions you should avoid before you file for bankruptcy. If you have questions, or if you require assistance with your bankruptcy case, you should get in touch with the bankruptcy lawyers at Kelley, Fulton, Kaplan & Eller.
Do Not Take On More Debt Before You File for Bankruptcy
Before you file for bankruptcy, it is critical to avoid taking on additional debt if you can avoid it. Depending upon your circumstances, it may be necessary to accrue more debt for medical care, for example, or by charging groceries or utility bills to your credit card. In many cases, these types of debts may still be dischargeable in a personal bankruptcy case even if they are accrued relatively close to the date of your bankruptcy filing. However, you should not charge anything that is not a necessity. Under the U.S. Bankruptcy Code, there is a presumptive fraud rule that can have serious consequences.
What is presumptive fraud in a consumer bankruptcy case? In short, if you make any charges on a credit card of more than $800 in the 90 days before your bankruptcy filing, or if you withdraw cash advances from your credit card of more than $1,100 in the 70 days prior to your bankruptcy filing, the court will presume that these charges or withdrawals constitute fraud. Your discharge can be at risk, and you could face criminal consequences for bankruptcy fraud.
Do Not Turn Exempt Assets Into Non-Exempt Assets
You will need to be careful to avoid turning any exempt assets into non-exempt assets. For example, if you have some money in a retirement account, you should know that these assets are likely exempt. Accordingly, you should not take an early withdrawal in order to attempt to pay off some debt, for example. To determine which assets are likely exempt, you should seek advice from a bankruptcy lawyer.
Do Not Take Steps to Hide Non-Exempt Assets
You cannot take any steps to hide or conceal non-exempt property you own. Do not avoid listing certain assets on bankruptcy schedules, and do not attempt to hide evidence that you own certain assets. Doing so could mean that you do not receive a discharge, and worse, you could face bankruptcy fraud allegations.
Do Not Give Away Non-Exempt Assets
Do not give away any of your property to friends or family members in the months leading up to your bankruptcy filing. It might look like you were attempting to hide those assets so that they would not be liquidated in a Chapter 7 bankruptcy case or counted toward your repayment plan in a Chapter 13 case.
Contact a Bankruptcy Attorney in West Palm Beach
There are many actions you will need to avoid before a bankruptcy case in order to be eligible for a debt discharge. In addition, as we have discussed, there are critical actions to avoid in order to prevent allegations of bankruptcy fraud. When you are planning to file for bankruptcy, it is important to work with an experienced West Palm Beach bankruptcy attorney at Kelley, Fulton, Kaplan & Eller from the start. We can ensure that you have met all requirements for your bankruptcy case and that you are not at risk of the appearance of bankruptcy fraud based on actions you took prior to your filing. Do not hesitate to get in touch with our firm to learn more about how we can assist you.