Saturday, 12 January 2019

What You Need To Know Before Filing Bankruptcy

If you are thinking about filing bankruptcy there are some things you want to avoid doing before you file a bankruptcy petition, one of those things is that you want to avoid running up any credit cards before you file bankruptcy. If you run up your credit cards by using them to make a bunch of purchase before you file bankruptcy you could find yourself still responsible for those charges after your bankruptcy and depending on what kind of changes you've made that creditor could ask the bankruptcy court to dismiss your bankruptcy case altogether 

Tip: 1

The next thing that you want to avoid doing before filing bankruptcy is repaying any relatives you've had or any debts that you own to them, if you pay your family members in the 12 months before you file your bankruptcy you have to disclose those payments, then the bankruptcy trustee can recover the money that you paid to your relatives. If you're unable to repay that money to the trustee then the trustee will ask the relative that you paid to repay that money and you can imagine how uncomfortable asking from the trustee to repay that debt could be around the family table

Tip: 2

The third big thing that you want to avoid doing before you file bankruptcy is transferring any property like real estate or personal belongings, if you transfer any real estate or personal belongings out of your possession that could mean even selling it or giving it away depending on the assailant, it depends on the property and it's value. You need to get a plot fair market value for anything that you transfer prior to filing bankruptcy, for example, you give your brother your boat before you file bankruptcy because you don't want to disclose that you have a boat, you want to protect it and you're expecting him to return it to you after you file bankruptcy

You could think that the trustee wouldn't go after the boat and liquid it and liquidate that asset, or even worse you could find yourself facing prosecution for failure to disclose assets to the bankruptcy court. 

  • A couple of practical things to consider when you are thinking about filing bankruptcy is that if you are trying to put off behind bankruptcy or trying to keep your creditors at bay you might be considering liquidating at a retirement account in order to do that and before you do that you should consider talking to a bankruptcy attorney

You could file bankruptcy to get rid of those debts that you are trying to pay off or keep up with the monthly payment and still at the end of the bankruptcy process, you hold on to your retirement account. The other thing that you may be dealing with before you file bankruptcy is that a creditor has filed a lawsuit against you if they have, then you should respond to that lawsuit if you don't do anything, the creditor will get a default judgment and that default judgment will allow them to do three things

  • They'll be able to garnish your paycheck
  • They'll be able to garnish your bank account
  • If you're in real estate they'll place a lien against that real state, so you have to pay off that debt before you can sell that real estate

Tip 3

The most important thing for you to do when you are considering bankruptcy, talk to a bankruptcy attorney, be completely honest with the bankruptcy attorney about your financial situation, your bankruptcy attorney job is to go through the bankruptcy process as safely as possible with as much of your personal assets still intact. That means you need to disclose all your income assets debts and expenses it, in most cases people are able to keep all of their real estate, personal belonging, and then file bankruptcy. But unless you disclose all that information to your bankruptcy attorney, you could find yourself losing it.

I hope you learn something from this article

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