Bankruptcy What Not To Do
What Not To Do BEFORE Bankruptcy
Making mistakes when dealing with finances is common, and more and more people need to know: Bankruptcy what not to do.
DO NOT let your property get taken. After a house is foreclosed or a car is repossessed, there is nothing a bankruptcy will do to get it back. Seek our attorney’s protection before that happens.
DO NOT continue to use credit. Stop using your credit cards. Stop getting payday loans or other personal loans. Stop all credit entirely. Recent debt before filing for bankruptcy protection can limit your ability to wipe out those debts. In addition, the creditors may be successful in proving you are not filing bankruptcy in good faith. If that happens, you may not be able to receive bankruptcy protection at all.
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DO NOT transfer property out of your name for the sole purpose of keeping it out of the hands of the creditors.
DO NOT make a large cash advance before filing. Cash advances greater than $750 within 70 days of a bankruptcy filing are presumed to be an abuse and will be thrown out by the bankruptcy trustee unless you can make a convincing argument.
Stay away from a retirement account. Federal law protects retirement accounts. At some point, if you can’t right the financial ship, just move ahead with bankruptcy. If you try to use money from a retirement account, you may still end up in bankruptcy. And now your retirement account has taken a hit that as unnecessary.
Avoid any loan or credit purchase you don’t intend to repay. This goes back further than the strict 70 or 90 day rule in federal bankruptcy law. A trustee has the power to go back a year or more and decide a purchase on credit was an abuse because you never intended to repay for the cost of the item.