What Not to do Before Filing for Bankruptcy
Last year, close to a million people filed for personal bankruptcy. If you’re facing crippling debt but think bankruptcy is for losers, think again. While it’s not an immediate fresh start, studies have shown that those who filed for bankruptcy actually did better in life financially than those who should have filed but did not. With that in mind, let’s talk about what not to do before actually filing for bankruptcy.
- Do not pay creditors large payments. This may seem to go against the grain, but hear us out. Yes, you should continue to pay your monthly bills – electricity, water and even the credit card if possible.
However, any large payments to single creditors – even if you’re clearing the whole debt – can set you up for trouble down the road. After filing for bankruptcy, these payments may be considered “preferential transfers.” In the eyes of the Court, they may be looked upon as having benefited unfairly over your other creditors. The payment may even be taken away by the Court.
- Stay to your routine. Any financial transactions you make before filing for bankruptcy should be completely normal. Many try to be clever by doing things like transferring large sums of money, titles of cars and homes, etc. to friends and family thinking those assets will be safe.
Any action like that can be considered fraud, and you will likely receive criminal charges.
- Don’t keep it on the down-low. You shouldn’t wait to tell your creditors that you’re considering filing for bankruptcy. If they do not know, they may sue you or garnish your wages and seize your assets in trying to collect. While it is possible to get some of those assets back after filing, it’s a long and expensive process.
- Be honest. We’ve posted stories before of the rich and famous being busted for hiding assets. You can read them here and here. Remember, you are required by law to provide accurate and complete information when filing for bankruptcy.
If you’re caught fibbing or hiding, chances are you’ll be charged with fraud.
Make Sure Your Bankruptcy is Legal by Calling The Oswalt Group
We understand that it can be embarrassing to seek help from crippling debt. But remember, you’re not alone. In fact, if you file, you’ll be among nearly a million people who’ve actually done the same thing. For even better news, remember there is a host of options for handling debt besides bankruptcy. Get in touch with us here at The Oswalt Group; we’d love to talk with you about your options. For a free consultation, call us at (602) 225-2222.