Things Not To Do When Contemplating Bankruptcy

Things Not To Do When Contemplating Bankruptcy

Before you file for bankruptcy, you should carefully plan with your attorney to steer clear of mistakes that could prove costly.  Here is a list of common mistakes that you should avoid:

  • Trading unsecured debt for secured debt: Avoid paying off debt with money from a home equity loan or second mortgage. When you file for bankruptcy most of your unsecured debt is discharged. If you take out a secured loan, you could risk losing whatever you put up for collateral if you miss too many scheduled loan payments.
  • Transferring property or assets out of your name: Many people mistakenly believe that they can protect their property from creditors by giving it away before they go bankrupt. Remember, some property like homes, cars, jewelry and cash fall under an exemption category and may be protected under bankruptcy. And, the transfer might not be effective anyway. The bankruptcy trustee can recover non-exempt property depending on when the transfer was made. Also, you may risk losing the ability to get a discharge depending on when the transfer was made.
  • Paying off debts with money from retirement accounts: Most pensions and qualified ERISA retirement funds are protected in the bankruptcy process. Money pulled from most retirements accounts are subject to tax and perhaps penalties.  Don’t use these accounts to pay off unsecured debt that most likely will be discharged in your bankruptcy.
  • Hiding information from the bankruptcy court: Be sure to accurately list all of your assets and debts on your bankruptcy petition.  You are allowed to amend your petition if you make a mistake, but intentionally hiding information will cost you when the trustee makes the discovery.
  • Concealing vital information from your attorney: any information relating to your debt or assets is vital for your attorney. When you withhold information your attorney is not in a position to protect your rights.

Careful planning with a bankruptcy attorney can help you avoid making costly mistakes.

Categories

Reviews

From Our Clients
  • “We had great experiences with Mr. Roy. And all the folks here. Kevin and Chris and all the people were very kind and thorough in looking after our situation many years ago.”

    - Kathryn D.
  • “My wife Jane and I were experiencing a very difficult financial situation. Debts, foreclosure, repossession's to name a few. We were referred to Lansing Roy and it was one of the best decisions we ...”

    - Douglas P.
  • “Smartest man on the block!!! A wonderful firm!!! An excellent choice!!! Expand, expand, expand”

    - Brenda B.
  • “Filing for bankruptcy is, obviously, not a pleasant experience. The process, from making the decision, through the final disposition, is emotional and stressful. Our situation was complicated and took ...”

    - Kerry M.
  • “All around great to work with!! This firm is excellent!! I was referred by a family friend and I could not believe the level of service.”

    - Satisfied Client
/

How We're Different

  • Free In-Office Bankruptcy Workshop
  • Well-Versed in Bankruptcy Law
  • Solid Reputation in the Industry
  • Caring & Personable Service
  • Non-judgmental Approach to Each Case

Contact Us

Fill out this form to request a free consultation.
  • Please enter your first name.
  • Please enter your last name.
  • Please enter your phone number.
    This isn't a valid phone number.
  • Please enter your email address.
    This isn't a valid email address.
  • Please make a selection.
  • Please enter a message.