Many consumers unknowingly make detrimental financial mistakes before filing for bankruptcy. These mistakes can ultimately affect the outcome of your case. By avoiding the below mistakes, you can assure your bankruptcy filing goes smoothly and avoid challenges by your creditors and the bankruptcy trustee.
• Do not transfer money or assets: Oftentimes consumers will transfer funds to a family member or change the name on titles to a child or spouse’s name. The court will view these type transfers as fraud, even if you have innocently transferred the property without any intention to conceal it.
• Do not pay off certain creditors: Consumers sometimes pay off certain bills just before filing bankruptcy to satisfy their creditors. However, if a court finds these payments as “preferential transfers” it can lead to “claw back” lawsuits where the court sues the entity you paid to get the money back.
• Avoid using your credit cards: Do not accrue unnecessary debt just because you anticipate it will be erased in bankruptcy.
• Do not make unusual deposits into your bank account: Only deposit salary or wages into your bank account. For example, do not deposit any money in your account that you have borrowed from others or that has been given to you. A tip to small business owners: Avoid conducting transactions for the business through your personal account.
• Do not sue anyone: Any legal claim that you have is an asset that can be taken by the bankruptcy court. Even claims that you may have against others that have not been filed in court, is property of the bankruptcy estate.
• Speak to your attorney before accepting future payments: Bankruptcy court can seize funds that are not actually in your possession, but you expect to receive. For example, if you are receiving an inheritance which will be paid in the future or filing tax returns that result in a refund.
• Waiting too long to file: Many of the mistakes above can be avoided by simply not delaying the filing of your bankruptcy claim.
Click here to read more on mistakes to avoid before filing Chapter 7 bankruptcy.
If you are in a financial crisis and are considering filing bankruptcy, contact an experienced Miami bankruptcy attorney who can advise you of all of your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade & Garcia, P.A. has been helping people from all walks of life build a better tomorrow. Our attorneys’ help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade & Garcia website at www.miamibankruptcy.com.