Five Things You Should Never Do Before Filing For Bankruptcy

Here, you can find a list of the top five things you should avoid doing before filing for bankruptcy…

• Don’t Start Spending With Impunity

Some sources out there may suggest that once you file for bankruptcy, you can make as many purchases with your credit cards as you want until the process is over. The truth is, that’s not a good strategy. Of course, you’ll lose all of your credit cards once you file for bankruptcy, but it’s not a good idea to try and abuse them in the meantime just because you know you’ll get rid of the debt.

• Don’t Sell Something So That It Won’t Be Taken Away From You

In preparation for a bankruptcy filing, you might think it’s a good idea to sell something so that you can keep the money or use your wildcard exemption for something else… This tactic goes very badly for those who try it.

For example, suppose you have a car and know it will be taken, so you sell it before filing. Once you file for bankruptcy, the court will consider that car sale a “fraudulent transfer”. As time goes on, what once seemed like a quick way to cheat the system will come back to haunt you in all the wrong ways.

• Don’t Take Money Out Of An Investment

It’s rarely a good idea to make an early withdrawal from your retirement accounts – and that certainly doesn’t change just because you file for bankruptcy.

Funds that you take out of your 401k before filing will be counted towards your income and can impact whether or not you qualify for Chapter 7. Clearly, it’s a better idea to just leave your 401k be.

• Don’t Make Just Any Big Purchase

Some people will make a big purchase right before filing for bankruptcy. In some cases, that’s okay. You just have to be careful with what you’re purchasing.

If you’re getting a car because you need a car, that’s fine – but if you pay for a big vacation right before you file for bankruptcy, it won’t look good on your bank statements.

• Don’t Repay A Family Member First

If you’re thinking about repaying a family member before you file for bankruptcy, you should think again. Paying someone you know before you file is called “inside creditor treatment”. If the bankruptcy court finds that you have made payments of this nature, they could go so far as to “reverse” the payment and require your family to pay the money back.

With the guidance of a skilled attorney for Bankruptcy Law Cases In Florida, you can have the peace of mind that comes with knowing that we’ll make it look easy.

For more information on the Exemption Of Assets In A Chapter 7 Bankruptcy, an initial consultation is your next best step. Get the information and legal answers you seek by calling (407) 305-5599 today.