Bankruptcy laws are in place to protect consumers and provide viable solutions to the burden of unmanageable debt. But, the laws and their associated processes are strict and clearly defined, so it is important to know what to do—and what not do—when filing. Making a mistake can derail a bankruptcy case or get it thrown out of court. For the strongest chances of a successful outcome, follow these bankruptcy guidelines.

Do:

Disclose everything.

Don't attempt to hide assets as a way to shield them from bankruptcy. This includes giving money or transferring property to friends or family members so they can "hold" these assets for you until the bankruptcy courts dismiss your debts. Bankruptcy laws require that you disclose all assets in your name, and the courts will verify this information. It is both unethical and illegal to hide assets in bankruptcy.

Consult an attorney.

It's no secret that bankruptcy laws are complex. Navigating the legal system can quickly become overwhelming if you do it on your own. A bankruptcy attorney will complete the large amounts of paperwork associated with the filing; handle all communications with creditors and courts; and represent you at your bankruptcy hearing. In short, you have an ally in what can be a daunting process.

Don't:

Spend.

In the days, week, and months leading up to your bankruptcy, don't rack up huge amounts of additional debt with the hopes that these balances will be wiped away by your impending filing. The courts look back at least three months to get an idea of your spending habits, and if they suspect your purposely took on new debt with the intent of having it eliminated in bankruptcy, they may exempt it from dismissal.

Negotiate with your creditors.

Bankruptcy laws require creditors to stop seeking payments or taking collection action once a debtor has filed for bankruptcy. If creditors are still pursuing you, you have no obligation to speak with, negotiate with, or pay them once the filing is submitted. Should they call, simply inform them that you have filed for bankruptcy, and then refer them to your attorney. Also, promptly bring any collection notices or notices of legal action to your lawyer.

Ray T. Kennington, Attorney at Law, is here to help guide you through the intricacies of bankruptcy law. Since 1982, he has been representing the Ozark, AL, area in various legal issues. In addition to bankruptcies, he handles family, criminal, and Social Security law cases. Call (334) 445-1200 or visit him online to schedule a free consultation.