After you list all your options and you finally decide that enough is enough and you want to file for bankruptcy, it is best to know the things that go on your behalf and against you, so you will not have troubles that can hurt your bankruptcy case.
Do: Tell your Lawyer Everything
Even if it is embarrassing it is better if your attorney knows everything about your situation. Don't tell your attorney that certain items of personal property do not belong to you if they really do belong to you. Anything that isn't listed in your petition may not be discharged.
Do: Pay Your Basic Expenses
You need whatever cash you have for basic needs. You need to take care of your family and the roof over your head that means you should still pay your regular monthly expenses, such as rent and utilities. Another good use of your money right now is to pay your lawyer. Once you've decided to file bankruptcy, you need legal help and that requires paying your attorney.
Do: Get Credit Counseling
There can be a long wait to get an appointment to see or talk to a counselor. You don't want to be in the position of being ready to file and unable to do so because you haven't taken care of this.
Do: Close all Bank Accounts
If you have any banks or credit unions to which you owe money. You should close them. Also, let your creditors know that you are having problems.
Do: Keep paying things you intend to keep
You should continue making payments on all vehicles and real estate you wish to keep. Remember, you must keep these payments current, the property insured and sign a reaffirmation agreement in order to keep secured property.
Do: Have a bank account open
Do understand that if you a have a credit card or secured property at the same bank where you have a checking or savings account, the bank may withdraw funds from your bank accounts to cover the debts owed.
Do: Be Honest and Cooperative
If you have file for bankruptcy petition. It is against the law to lie in bankruptcy proceedings. You should have a bank account open at a bank that you do not owe money before your bankruptcy is filed. Although obtaining future credit is relatively easy after your bankruptcy, opening a bank account is extremely difficult.
Do: Maintain Records
Have your books and records in order prior to consulting with your attorney.
Do: Have Patience
Understand that it takes approximately 4 to 6 weeks after meeting with a paralegal for your petition to be completed. This time may vary depending on the amount of documents needed and how quickly you return them.
Don't: Hide Assets
Some people want to go too far with this and actually hide their assets. They'll ask if they should take all the money out of their bank accounts before they file. The money is still their property and they have to list it on their petition. Lying on your bankruptcy petition is a Federal crime and the punishments include prison, fines and the likely event that your debts will not be discharged.
Don't: Transfer Property or Money
It is important for you to be aware that transferring title to property before declaring bankruptcy may not be an option. Don't sell or transfer assets to your friends or relatives to hide them from creditors or the bankruptcy court. The trustee will ask you about such transfers at the first meeting of creditors, and has the power to recover those assets. Also, don't transfer money into your kids' bank accounts. They have you as a co-signor and are subject to the same review as your accounts.
Don't: Leave out income
People think that a second, part-time job does not count as income. All household income must be included. If you want to claim somebody as a dependent in your bankruptcy, you must include his income.
Don't: Pay to the preferred creditors
Many consumers want to pay certain creditors in full before filing for bankruptcy. The court doesn't want you to play favorites and pay money to some creditors and not pay the rest. The Trustee can reach back ninety days to recover money paid to general creditors and spread it out more evenly to all of your creditors.
Don't: Sell your property for less than what it's worth
This will not reduce the amount you have to repay and you may end up stuck with the difference.
Don't: Make Last Minute Charges
When the creditor gets the notice that you filed, it takes a look at your account history. If it sees a bunch of charges right before filing, it will get suspicious.
Don't: Talk to your creditors
If you have filed for bankruptcy then don't talk to your creditors. You can tell them to talk to your attorney about your case and debts.
Don't: Spread News
Avoid unnecessarily spreading the news that you have filed for bankruptcy.
Don't: Save a credit card
If you have a credit card with a balance for after your bankruptcy. The credit card company will likely close your account anyway, just after you make a payment. You can continue to use debit cards which withdraw directly from your bank account.
Don't: Make deposits into your bank account
Do not deposit any money, which is not considered salary or payment to you, into your bank account.
Don't: Take Cash Advances
Do not try to take any major cash advances off of credit cards prior to filing for bankruptcy. The court may suspect that you are acting in bad faith and may refuse to discharge the debt.
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