Filing for bankruptcy offers those with unmanageable debt a path to financial stability and a second chance. Before you file, there are some important details to be aware of, so you know what not to do. Avoiding common missteps will make the process that much easier to navigate, and the entire elimination of debt can work its way through the courts with minimal interruptions or snags. Below are a few actions to avoid before a bankruptcy filing.
What to Avoid Before a Bankruptcy Filing
1. Acquire New Debt
Once you've decided to file, stop using all credit cards immediately. If an individual adds to their debt in the days or weeks immediately preceding filing, it could raise the suspicion of the courts, and they may not allow the discharge of debts accumulated up to 90 days before filing. So, while some people might think it a good idea to take a lavish vacation or purchase a new wardrobe in the hopes of having those bills discharged in bankruptcy, they'll likely still get stuck with the tab in the end.
2. Ignore Creditors
If a creditor is pursuing you for an outstanding balance, deal with the issue directly. Don't ignore their attempts to contact you, and don't promise them payment when you can't afford it. Tell them honestly that you are having financial difficulties; even just one phone call could help temporarily stall a foreclosure or repossession. Upon filing bankruptcy, inform creditors when they contact you that you have taken this step. They are required by law to stop collection attempts from then on.
3. Hide Assets
It is illegal to try to hide your assets from the bankruptcy courts. You are required by law to list all property and assets you own as part of the filing. Never transfer money or ownership of property to someone else with the goal of one day reclaiming that money once your bankruptcy is finalized. If the courts discover concealed assets, your entire case could be thrown out, and you could be barred from filing again. Additionally part of the information that must be disclosed to the court are transferred assets. It is impossible to protect assets that have been transferred away.
The best advice is to contact competent bankruptcy counsel to guide you through the bankruptcy process.
Steering clear of the above bankruptcy errors will keep you firmly on the road to debt relief. Bankruptcy lawyer Nancy V. Jacob is here to help at every step. She has nearly three decades of experience serving the Greater Cincinnati and Hamilton County, OH, area. She will guide you through the tricky legal process to achieve the best possible outcome for your case. To get back on firm financial footing, schedule a free consultation by calling her law office at (513) 921-1400 or visiting her online.