3 Things You Should Not Do If You Are Considering Bankruptcy

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Bankruptcy law frowns upon certain actions taken by the individual’s filing within a period of time before the bankruptcy filing. Bankruptcy filers must file their cases in good faith, disclose all assets and income, and disclose all financial actions taken before the bankruptcy. Certain actions taken by bankruptcy debtors before the filing, may cause a delay in filing your case or worse, may cause you to have financial penalties. In order to ensure that your bankruptcy case goes smoothly and does not receive objections from the bankruptcy trustee, the government official in charge of reviewing your case, there are three simple things you must avoid doing if you are considering filing for bankruptcy.

1.   Transferring Assets

Transfers, of both money and other personal or real property (such as a home or car), have to be reported in your bankruptcy schedules if they occurred in the past 2 years. In addition, the Trustee can ask about any transfers going back for up to 4 years. Transferring assets from your name to someone else’s name may be considered bad faith and a concealment of assets. Even if your intentions were not to defraud the court, it may appear that way to the Trustee.  In order to know if any past transfers may affect your bankruptcy, it is important to disclose them to your attorney before any filing.

2.   Filing lawsuits

Any and all active lawsuits within the past year of being active must be disclosed in your bankruptcy schedules. When you file for bankruptcy, your current assets and certain future assets (such as a settlement) are considered part of the bankruptcy estate. What this means is that if you get a sum of money from, for example, a personal injury lawsuit settlement, the Trustee can take those amounts to pay your creditors. If you are considering filing for bankruptcy, it is important to take into account that you may not be able to keep proceeds you receive from a settlement if you file within a certain time frame before/after your bankruptcy case.

3.   Opening New Lines of Credit/Using Your Credit Cards

Chances are, if you are filing for bankruptcy, your credit is not in the prime condition it once was. But in the off chance that you were approved for a credit card close to your filing date, it may present a complication in your case if you are intending to include that debt in your bankruptcy. Any purchases you have made will be strictly reviewed by the bankruptcy trustee. In addition, creditors may also have an issue with recent charges to their accounts which are then included in your bankruptcy. Your bankruptcy attorney will ask you about your accounts and recent credit card activity. It is important to be candid and honest with your attorney to see what your best options are to avoid any complications in your bankruptcy.

2018-08-23T16:49:28+00:00 May 8th, 2017|Categories: Bankruptcy|Comments Off on 3 Things You Should Not Do If You Are Considering Bankruptcy