Filing for Bankruptcy? Don’t Do This!
Do you only make minimum payments on your credit cards?
Are bill collectors calling you?
Does the thought of sorting out your finances make you feel scared, or out of control?
To determine if it is time to file for bankruptcy, click here to read our post on discovering “When is it Time to File for Bankruptcy and What are my Options?”
But if you feel like you are on the path of bankruptcy, here are a few tips on what NOT to do before filing.
1.Don’t Drain Your Retirement Account.
Bankruptcy is the start of a clean slate. However, your time in bankruptcy does not last forever. So, you need to look forward to the future and protect your retirement funds as much as possible, so that you can enjoy the later years in life. One of the most unfortunate financial mistakes that people regularly make before filing for bankruptcy is withdrawing retirement funds to pay off a debt that bankruptcy can easily erase.
2. Don’t Provide Inaccurate, Incomplete or Dishonest Information.
Dishonesty can do you no justice when you are in the process of filing for bankruptcy. You need to be able to provide all of your expenses to your lawyer, so that they can see your whole financial picture. On your bankruptcy paperwork, you’re required to provide under penalty of perjury complete and accurate information about all of your assets, debt, income, expenses and financial history. If you knowingly misrepresent your information, you could be committing fraud, which is a criminal offense. This would likely result in not only your case being dismissed, but criminal charge being brought against you.
3. Don’t Rack Up New Debt.
Today is the day that you can turn over a new leaf and start anew. This means that you must watch what you spend and don’t over spend. If you ran up debt within 90 days before filing bankruptcy, beware that unless it was for necessities of life, such as food, clothing, and utilities, a creditor might object to your discharge. The creditor would argue that you made those purchases or took out the loan without any intention of paying it back which is fraud.
4. Review Your Monthly Expenses.
This goes hand in hand with starting fresh. In order to get a handle of your spending, it is recommended to monitor and keep track of your spending habits.
5. Don’t Transfer Money or Property.
Many individuals are under the impression that if they transfer assets to someone else’s bank account that it will protect them. This is untrue and the items will be found out in bankruptcy court. However, having assets does not mean that you cannot file a bankruptcy, nor that you will necessarily lose them. An experienced bankruptcy attorney will be able to tell you the best way to deal with assets that you fear may be exposed when you file a bankruptcy.
Bankruptcy is often seen as the end of everyone’s financial well being. However, the bankruptcy laws were created to give an individual or business a fresh start. Sometimes unforeseen events, like medical emergencies, divorce, or unemployment, occur and put you behind in your payments. We here at Nikolaus & Hohenadel, LLP are prepared to help you figure out whether bankruptcy makes sense or if there are other alternatives to remove the financial burdens. Our goal is to help you get back on track with your life.
With five convenient locations and armed with a stellar reputation, let Nikolaus & Hohenadel, LLP help you navigate the waters of your bankruptcy. Click here to contact us!