Many people, for whatever financial reason, are forced at one time or another in their lives to file for bankruptcy. This doesn’t mean that they’re ‘bad’ people or that they have made particularly bad decisions (although let’s be honest, many times it’s the case). Whatever the reason there are certain things that you should do and, more importantly, should not do when filing for bankruptcy to make sure that you don’t open yourself up to more liability.
With that in mind we have put together some Tips and advice for those of you that are facing this financial hurdle so that you can get over it with the least amount of damage. Read on and then use them with our blessings.
- Possibly the most important Tip when declaring bankruptcy is do NOT lie. If you don’t qualify for whatever reason you’d be best to use any other options first before declaring and then having to hide the facts.
- Don’t leave out any income, no matter how insignificant it may seem. Even the income your daughter earned from a part-time waitressing job on the weekends should be declared if you’re going to include her as a dependent in your bankruptcy.
- Don’t forget to include every car you own. The best way to lose it is to not list it, which many people mistakenly think is the opposite. Also don’t transfer the car to another family member’s name before filing as this is a good way to lose it also. This goes for car loans also.
- Leaving out creditors is a big no-no. The simple fact is that, even if you don’t notify them, they will find out that you’ve filed. Credit Union accounts are a bit different however and may be kept in certain instances so check before you file.
- Transferring assets before you file is not only illegal but unnecessary in many cases. A competent lawyer should be able to protect your assets in most cases.
- Paying back family members in the 12 months prior to filing isn’t a good idea and can negatively affect your filing. Check before you file to make sure.
- If you’re in the middle of litigation to get money owed to you this is considered an asset so don’t forget to include it. This can become an asset in a bankruptcy case and may be significant. Let your lawyer handle this.
- Gambling losses in the 12 months prior to your bankruptcy can negatively affect your case so do your best to stay away from the casinos and the track at all costs.
- Running up credit card balances before filing bankruptcy is a bad idea. Your credit card company can dispute these charges if they think you did it on purpose and you’ll end up owing the money anyway.
- By all means do not wait until your credit is a total mess and your wages are being garnished to file. If you know that you’re going to be in trouble (and most do) file right away to give your lawyer the chance to help you as much as possible.
- Lastly don’t let bankruptcy get you down. It happens to a lot of people and the best thing that you can do is get through it and learn from it so that it never happens again. Best of luck.