Bankruptcy Do's and Don'ts
What you should and should not do in bankruptcy.
The legal right to a fresh start under the U.S. Bankruptcy Code comes with responsibilities. Even if you're not sure that bankruptcy's right for you, try to keep these ideas in mind as you deal with your debt problems. Following these do's and don'ts will protect your future ability to take full advantage of your rights under bankruptcy law.
For detailed advice about your situation and your options, there's no substitute for talking to an experienced bankruptcy attorney. Contact us at O'Bryan Law Offices in Louisville, Frankfort or New Albany to Schedule a Free Consumer Bankruptcy Consultation*.
Important things to DO while considering filing for bankruptcy
- Stay current on your payments on home mortgages or car loans, unless you are willing to give those assets up to the creditor.
- Contact a lawyer before you make any major financial decision or commitment.
- Sell assets for fair market value rather than deep discounts if you need to raise cash.
- Make sure that your list of debts is complete and accurate, you can't discharge a debt that isn't listed on your bankruptcy schedules.
- Be honest with your bankruptcy lawyer about your income and assets, otherwise you could jeopardize your discharge or even be indicted for bankruptcy fraud.
Also, DO find out the fair market value of home and vehicle: If you own a home or car, it is good to know how much these assets are worth. If you have more than one mortgage or lien on your home, we may be able to assist you in removing the second or subsequent mortgage through bankruptcy.
DO an inventory of what you own: In Chapter 7 bankruptcy, your nonexempt assets can be sold, or liquidated, to pay your creditors. Therefore, before you file bankruptcy, it is a good idea to understand the nature of your assets in order to determine whether or not these assets will be subject to liquidation in Chapter 7.
Make sure you DON’T do these things!
- Avoid using your credit cards for six months prior to filing for bankruptcy, especially for cash advances. You might have to pay back an otherwise dischargeable debt.
- Don't pay more than $600 on debts owed to family members.
- Don't borrow from your 401(k) account to pay bills.
- Don't pay down any unsecured credit within 90 days of your expected filing date.
- Don't make more than one payment at a time on any debt if you're leaving other bills unpaid.
- Don't try to shelter your assets by transferring them to others for less than fair value.
Observing these do's and don'ts will help set you up to make the most of your right to debt relief under the Bankruptcy Code. For dependable advice about your own situation or particular debts, contact us at O'Bryan Law Offices at any of our Kentucky or Indiana locations.
In short, playing games with the system is dangerous. At O’Bryan Law Offices, our attorneys fully understand how the bankruptcy laws apply to your situation and will keep you away from any of these pitfalls.
We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.