Bankruptcy: Three Tips to Follow Before Filing | BankingBlawg

by josephperkins on November 14, 2012

(Bankruptcy laws in the US) As with many other major decisions and events in life, bankruptcy is one that must come with thought and preparation. It is not to be taken lightly. Many bankruptcy filers make mistakes prior to filing that can potentially damage their case and cause them to have an unsuccessful bankruptcy filing. When it comes to filing for bankruptcy, what you do not know can hurt you. Paying family members back, running up high credit card balances, and gambling prior to bankruptcy can all have a negative impact on a bankruptcy case.

Tip #1 ? Do Not Pay Back Family Prior to Filing Bankruptcy

This may seem like an unfair or unethical tip, but paying family back within the 12 months prior to your bankruptcy filing can only lead to more trouble. When you file bankruptcy your family members and friends are considered creditors just like the major bank down the street that holds your bank account and your mortgage. Paying family members or friends back gives them an unfair advantage as a creditor in your bankruptcy. In fact, bankruptcy courts frown even more so on paying back family and friends prior to filing than they do other creditors. If you owe family or friends a debt that you feel you need to pay, or have already paid in the 12 months prior to your bankruptcy filing, bring this to your lawyer?s attention immediately.

Tip #2 ? Do Not Gamble

For people experiencing financial problems it may seem like a possible quick fix to gamble in an attempt to win big and pay off debts. This is a big mistake when it comes to bankruptcy filing. Gambling losses and wins must be reported in your bankruptcy paperwork and can have a negative impact on your case. If you have been gambling in the 12 months prior to your filing, or are tempted to gamble, please discuss this with your bankruptcy attorney.

Tip #3 ? Put Away the Plastic

As tempting as it can be to use your credit cards to pay for much needed groceries, pay utility bills, or even buy a new wardrobe prior to filing this is also frowned upon. Upon receiving notice that you have filed for a personal bankruptcy, your credit card companies can review your purchase history. If they believe you intentionally ran up your balances prior to filing they can legally challenge your filing and request to have all or some of your balance removed from the bankruptcy. This means even at the end of your bankruptcy you will still be responsible for all or some of this debt.

If you are considering filing for bankruptcy it is important to consult with an experienced Cedarburg bankruptcy attorney. They can advise you of what not to do prior to filing in more detail and help fix any mistakes you may have unknowingly made. Being open and honest with your attorney is the first step in getting your financial life in order through bankruptcy.

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Tagged as: Bankruptcy law blogs, Bankruptcy laws

Source: http://www.bankingblawg.com/bankruptcy/bankruptcy-three-tips-to-follow-before-filing/

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