Posted on March 28th, 2023

Filing for bankruptcy can be a difficult decision, but it can also be a path towards financial freedom. However, it's important to approach the process with caution and avoid actions that could jeopardize your case. In this blog post, we'll cover some of the things you should NOT do immediately before filing for bankruptcy.

Understanding Bankruptcy

Before we dive into what you should not do before filing for bankruptcy, let's first talk about bankruptcy itself. Bankruptcy is a legal process that allows individuals and businesses to eliminate or restructure their debts. There are different types of bankruptcy, but the most common types for individuals are Chapter 7 and Chapter 13.

Chapter 7 bankruptcy involves the liquidation of non-exempt assets to pay off debts, while Chapter 13 bankruptcy involves the repayment of debts over a period of three to five years. Both types of bankruptcy have their own rules and requirements, and it's important to understand these rules before filing.

Do Not Transfer or Sell Assets

One of the most important things to avoid before filing for bankruptcy is transferring or selling assets. This can be seen as an attempt to hide assets from creditors or the bankruptcy court and can lead to your case being dismissed or even criminal charges being filed against you.

It's important to be transparent about your assets and debts when filing for bankruptcy. Transferring or selling assets can not only lead to legal issues but also make it more difficult to negotiate with creditors and trustees.

Do Not Use Credit Cards

Using credit cards before filing for bankruptcy can be seen as an attempt to defraud your creditors. Any debt incurred through fraudulent means may not be eligible for discharge in bankruptcy. It's important to be honest about your financial situation and avoid any actions that could be seen as deceptive.

If you are struggling with debt, it's important to seek help as soon as possible. There are many resources available, including credit counseling services and financial planners, that can help you manage your debt and avoid bankruptcy.

Do Not Pay off Some Creditors and Not Others

It's important to treat all creditors equally when filing for bankruptcy. Paying off some creditors and not others can be seen as preferential treatment and may not be allowed. It's important to be transparent about your financial situation and work with an experienced bankruptcy attorney to negotiate with creditors and develop a repayment plan that is fair to all parties.

Do Not Take out New Loans

Taking out new loans before filing for bankruptcy can be seen as an attempt to defraud your creditors. Any debt incurred through fraudulent means may not be eligible for discharge in bankruptcy. It's important to be honest about your financial situation and avoid any actions that could be seen as deceptive.

Do Not Ignore Your Financial Situation

Ignoring your financial situation and failing to disclose all your assets and debts can lead to your case being dismissed or even criminal charges being filed against you. It's important to be transparent about your financial situation and work with an experienced bankruptcy attorney to develop a strategy that maximizes your exemptions and protects your assets.

Do Not Delay Filing

Delaying filing for bankruptcy can lead to additional debt and financial stress. If you are struggling with debt, it's important to seek help as soon as possible. Filing for bankruptcy can be a difficult decision, but it can also be a path towards financial freedom.

Getting Help

Navigating the bankruptcy process can be complex, and it's important to work with an experienced bankruptcy attorney who can help you protect your assets and achieve a fresh financial start. At Sidney Mickell, Attorney at Law, we have the knowledge and experience to guide you through the bankruptcy process and help you understand your rights and options.

We can help you evaluate your financial situation, maximize your exemptions, and protect your assets. Our team is dedicated to providing compassionate and personalized legal services that are tailored to your unique needs.

In conclusion, there are several things you should not do immediately before filing for bankruptcy. It's important to be transparent about your financial situation and avoid any actions that could be seen as deceptive or fraudulent. Working with an experienced bankruptcy attorney can help you navigate the bankruptcy process and protect your assets.

At Sidney Mickell, Attorney at Law, we have the knowledge and experience to guide you through the bankruptcy process and help you achieve a fresh financial start. Contact us today to schedule a consultation and learn more about how we can help. You can reach us at (132) 3309 1137 or [email protected].

Remember, filing for bankruptcy is not a sign of failure or defeat. It can be a powerful tool for eliminating or restructuring your debts and achieving a fresh financial start. Don't hesitate to reach out for help if you are struggling with debt.