- Run up credit card debt. Credit card charges that exceed a certain amount are considered abuse under bankruptcy law if they are made within 70 to 90 days of the bankruptcy filing. A bankruptcy trustee can exclude that debt from your bankruptcy case.
- Purchase a luxury item. If you purchase a luxury item within 90 days of filing for bankruptcy for at least $500, it is considered abuse under bankruptcy law. This means, the bankruptcy trustee has the authority to exclude that purchase as well.
- Take out a large cash advance. Cash advances that exceed $750 and are made within 70 days of a bankruptcy filing are presumed to be an abuse and will most likely be thrown out by the bankruptcy trustee.
- Sell valuable property. Bankruptcy trustees have the authority to revoke any fraudulent sales or transfers made before a bankruptcy filing. Transferring property raises a red flag because the trustee will assume the transfer was made to avoid losing the property.
- Pay off a debt to a relative. In bankruptcy cases, relatives are considered “insiders.” Bankruptcy trustees can force “insiders” to return payments or rescind property sales that were made just before a bankruptcy filing.
- Access funds from your retirement. Federal bankruptcy law protects retirement accounts. Florida is one of seven states where all IRA’s are considered a bankruptcy exemption. Under Florida Statute 222.21, IRAs and Roth IRAs are completely protected by debtors in bankruptcy court. Another exception in most states is if a living spouse is the beneficiary of the IRA, they are allowed to treat it as their own in bankruptcy court and it is therefore, exempt. If you try to use money from your retirement account, you may still end up filing for bankruptcy and drain your retirement savings.
- Foreclosure, garnishment or repossession. Bankruptcy can protect you from collection actions, but only if you file before a collection action has begun in court. If you wait too long, you risk losing your home or car.
- Utilize a secured loan. Secured loans are considered non-dischargeable debts in bankruptcy. If you are searching for alternative solutions before filing for bankruptcy and take out a secured loan against your vehicle or home, you may ultimately lose them if you cannot make the payments.
- Take out loans or make credit purchases you don’t intend to repay. Bankruptcy trustees have the authority to look back a year or more to decide if a purchase on credit was an abuse because the filer never intended to repay the cost of the item.
- Not consulting with a bankruptcy attorney. You should talk to an experienced bankruptcy attorney who can look at your financial situation and provide advice on whether or not bankruptcy is the right step to take. These consultations are oftentimes free of charge. Do not rely on friends, family or your own judgment. Seek expert advice.
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If you are in financial crisis and considering filing for bankruptcy, contact an experienced Miami bankruptcy attorney who can advise you of all 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.