Dont Get a Home Equity Loan
In short, your home is not an ATM machine. Many people postpone or sidestep bankruptcy by turning their home into an ATM machine with a home equity loan. They use the money secured by a lien on their home to pay off medical or credit card debt. Later on, they end up losing their home when they cannot afford the repayments. When you dont pay your medical bills or credit card debt, you get harassedthats usually it. However, when you trade in that unsecured debt for debt on your home, you turn your home into a loan that can be foreclosed on.
Dont Early Withdraw From Retirement
In short, your retirement account is not an ATM machine. Many people postpone or sidestep bankruptcy by taking the retirement savings they have spent so much time accumulating and paying off credit cards, medical bills, or other unsecured debt. Why would anyone want to do this if they otherwise qualify for bankruptcy protection. If you qualify, such debts can be reduced or simply wiped away. Are paying credit card bills with outrageous interest or inflated medical bills worth postponing retirement or even forgetting about ever retiring?
Dont Reaffirm Burdensome Debt
This one happens all of the time. A person reaffirms a loan or debt that they are otherwise completely free to disregard because of bankruptcy. Sometimes the reaffirmation is due to a perceived moral obligation. Other times, the person wants to keep a certain possession such as a car in which they owe much more than the value. Either way, the point of bankruptcy is to get a fresh financial start. Why handicap yourself when you could use that money to instead accumulate wealth.
Dont Wait Until Foreclosure or Repossession to File
Some people wait until after they have already lost their home, their car, or worse.attempted for years and years to pay back ridiculous medical or credit card debt, before they file for bankruptcy. Foreclosure and repossessions can be avoided and unsecured debt such as medical bills and credit card bills eliminated. Why not file for bankruptcy today and keep what you have worked so hard for all these years?
Dont Omit any Creditors From Your Bankruptcy Filing
Its simple.you cant get bankruptcy relief from a creditor you do not include in your bankruptcy paperwork. So why would you not include such a person or business? If you intend to repay the debt in the future, you can still do sobut shouldnt unnecessarily tie your hands.
Dont file for Bankruptcy When Expecting a Tax Refund
Your exemption for tax refunds is limited. Contact my office to discuss your options.
Dont Have a Large Amount of Money in Your Bank Accounts on the Day of Filing
Simply put, if you have more than a nominal amount of money in your bank accounts the day you file for bankruptcy, it may not be exempt from creditors. Starting a couple days after your case is filed, you can go back to normal bank usage.
Filing Bankruptcy less than 181 Days Before Receiving an Inheritance
Anything you inherit within 180 days following your fling for bankruptcy is included in your bankruptcy estate and may be available to creditors. If you expect an inheritance, make sure that you discuss this with our office when you come in for your FREE consultation.
Dont Go Crazy Spending Money On Your Credit Cards
Cash advances within 70 days before filing and purchases of luxury goods exceeding $500 each within three months before bankruptcy are presumed to be obtained under false pretenses. Additionally, it is not unheard of for credit card companies to look back to similar purchases over the preceding year in order to claim that you obtained the money through fraud of false pretenses. While such purchases may be covered, credit card companies can create problems in such situations and the Court may require a Chapter 13 bankruptcy filing instead of a Chapter 7 filing.
Dont Pay Large Amount of Money to Family, Friends, or Business Partners Before Filing
These are considered preferences and the bankruptcy trustee is sometimes able to take such money back and re-distribute to all of the creditors on a pro-rata basis.
Dont Fail to Attend your Hearing
In most cases, you simply must attend one meeting and the judge will not even be there. However, if you do not attend (and bring a photo I.D. and Social Security Card), your case could be dismissed.
Dont Transfer Assets To Others to Remove Them From Bankruptcy
Transferring assets to others to remove them from your upcoming bankruptcy can be problematic. Such assets can be recovered by the bankruptcy trustee and you could be in trouble if it is determined that you intended to deceive the trustee.