Things You Shouldn’t Do If You’re Considering Bankruptcy


May 12, 2017

Filing for bankruptcy is hard enough as it is. Sometimes it can’t be helped if you find yourself in a difficult financial situation. If you’ve already considered all other options, and declaring bankruptcy is the only way out of your debts, then you should prepare for the process with the help of a Florida bankruptcy lawyer.

Don’t Do These Things if You’re Considering Bankruptcy, Says a Florida Bankruptcy Lawyer

Before you do anything, you need to know the detrimental financial moves that can make filing for bankruptcy even harder. To help you navigate this process, here some things you should definitely never do when filing for bankruptcy.

Use Your Credit Cards

When you’re going through a rough financial patch, the first thing you should do is to stop using your credit cards. This is especially true if you will be filing for bankruptcy. Cease any form of excessive shopping or taking cash advances out of your card. If you need to buy anything – which should not be out of luxury either, opt to use your debit card instead or just pay in cash.

Make Preferential Transfers.

A preferential transfer is when you make a payment to one creditor over other creditors right before filing for bankruptcy. Most people do this in hopes that it will better their chance of obtaining a bankruptcy. However, all you’re doing is showing that you preferred paying one creditor over the other. Any out-of-the-ordinary payment to any creditor prior your bankruptcy is approved has the potential to damage it.

Do not hold on to other people’s money.

No matter the situation, do not let other people transfer money into your bank account if the money does not belong to you. This goes the same for taking checks and cash from people that could be traced back to yours. Other than your salary, make sure that you keep all your financial dealings separate – be it from your friends, relative who want to help you with your financial problems and your business.

Do not transfer assets to relative or friends.

Declaring bankruptcy is heavily hinged on good faith, so if you’re secretly transferring properties or cash to people you know, then that could hurt your bankruptcy case. The court could rule you as fraudulent, regardless of whether you actually intended to hide those assets or not. So, if you have properties pending transfer, do not make hasty decisions before filing for bankruptcy.

This occasionally occurs when someone has assets still in their name while and they believe the court would immediately take them away when they file. The truth is most people are able to keep these assets, and there are many exceptions to seizure, so there’s really no need to hide them.

Source: nolo.com

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About the Author

Michael works in practice areas of Personal bankruptcy – Chapter 7 and Chapter 13, FDCPA, FCCPA, TCPA, Improper credit reporting under the Fair Credit Reporting Act (FCRA), Collection Litigation Defense, and Foreclosure Defense.