In my years of practice, I’ve seen many clients fall into making these common mistakes prior to filing for bankruptcy. This is crucial time to restart your finances and get your life back on track. So I’ve created a guideline to outline to Do’s and Don’t prior to filing for bankruptcy.
Let’s start with the Don’ts.
- Don’t use your credit cards.
- Don’t take cash advances from credit cards.
- Don’t do balance transfers.
- Don’t pay back money to family, friends, or business partners
- Don’t make any major purchases prior to filing bankruptcy such as a home or automobile.
- Don’t pay more than $600 on any past due bill.
- Don’t cash out retirement plans or 401(k)s.
- Don’t take out a second mortgage.
- Don’t hide, transfer, or give away property to anyone.
- Don’t take out payday loans.
- Don’t put your money in your children’s bank accounts.
- Don’t omit a credit card so you can use after your bankruptcy.
- Don’t write bad checks.
- Don’t borrow money.
- Don’t make major financial decisions without talking to your attorney
- Don’t get married before filing if your spouse has a high income.
- Don’t misrepresent facts to your attorney.
- Don’t run up your credit cards in advance of filing bankruptcy.
- Don’t hide anything from your attorney.
Now Let’s go over the Do’s !
- Do tell your attorney about all accounts including checking, savings, credit union, or brokerage. Also include accounts closed within the past year.
- Do include all assets on your paperwork.
- Do tell your attorney about your businesses including sole proprietorships, LLC/LLP, partnerships, or corporations.
- Do list debts to family, friends, or business partners.
- Do tell your attorney about liens on your home or unpaid judgments so they can be avoided.
- Do tell your attorney about potential claims or rights you have to sue such as worker’s compensation, personal injury, slip and fall, or automobile accident.
- Do tell your attorney about all sources of money or income.