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Learning About The Process Of Filing Bankruptcy

Last year I had some financial difficulties and I couldn't pay off my debt. The uncertainty of my financial future was adding to my already stressful life. After months of worry, I finally decided to contact a bankruptcy attorney. After discussing my options with the attorney, I decided to file bankruptcy. My name is Kyle Diggler and if you're struggling with debt and considering bankruptcy, I'm here to help you. I'm not an expert, but I want to share my story and my experience of filing bankruptcy with others who are in a similar situation. As you read my blog, you'll learn all about the bankruptcy process so that you'll know what to expect. I'll also share some tips to help you start your life over financially. I hope that my blog answers all the questions you have about filing bankruptcy.

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Learning About The Process Of Filing Bankruptcy

3 Things You Should Avoid Doing Before You File For Bankruptcy

by Evelyn Perkins

Filing bankruptcy is a huge event, and if you're considering this, there are certain things you should do before you file—and certain things you should not do. Preparing to file for bankruptcy is something you should carefully think about, and you should also seek advice from a bankruptcy attorney before you decide to go through with it. Here are three things you should avoid doing before you file the paperwork.

Obtaining New Debt

When a person knows that he or she will be filing for bankruptcy soon, it might be tempting to go shopping and rack up a lot of new credit card debt. It only makes sense to use the credit lines while you can, right? Well, this is not a wise decision to make because it can be viewed as fraud by the bankruptcy court.

According to All Law, creditors may object to a discharge of new debt if it meets one of the following criteria:

  1. If the new debt was spent on luxury items totaling at least $650 to a single creditor within 90 days of filing. Luxury items include any types of items that a person does not really need.
  2. If the new debt was in the form of a cash advance over $925 and was completed within 70 days of filing, the creditor could also fight the debt.

These rules are in place to prevent people from racking up debts right before they file. If either of these apply to you, it might be wise to wait to file for bankruptcy for a few weeks or months.

Filing If You Are Expecting A Windfall Of Cash Or Assets

The second important factor to consider before you file is investigating every area of your life to determine if you will be receiving any type of cash in the next year. It often takes at least one year to complete a Chapter 7 bankruptcy case.

While the case is active, the bankruptcy trustee has the right to seize assets and cash gifts you receive. Because of this, it is extremely important for you to know if you will be receiving any type of cash in the near future. This can include cash and assets from:

  • Tax returns
  • Inheritance
  • Lawsuit settlement
  • Significant gifts from friends or family members

It is illegal to hide assets or cash windfalls during a bankruptcy case, and the trustee handling the case will keep a close eye on your financial health during this time to see if there are any assets that can be seized. If you are expecting money from one of these sources, it may be better not to file for bankruptcy, or to wait and file at a later point.

Giving Away Assets

When you file for bankruptcy, the trustee will determine whether your assets are exempt or not. You will be allowed to keep any exempt assets, but you may have to surrender assets that are non-exempt. Because of this, it might be tempting for you to "give away" some of your assets before you file, but this is not a good decision. The court also views this as a fraudulent act because you are trying to avoid getting your assets taken away. If you are going to file for bankruptcy, you may have to sacrifice certain things you own. This is a better route to take than committing fraud by getting rid of some of your things just to avoid having the court take them from you.

To learn more about how the bankruptcy process works, or what you should or should not do, contact a bankruptcy attorney like Wiesner & Frackowiak, LC and ask him or her all the questions you have about this subject.