Four Things You Should Not Do Before Filing For Bankruptcy

Failure to consult with an experienced bankruptcy attorney prior to filing for bankruptcy can result in costly mistakes. In fact, certain actions you take can cause serious problems for your case and may even be against the law.

Complying With the Bankruptcy Code

If you plan on filing for Chapter 7 or Chapter 13 bankruptcy in Denver, follow these tips to ensure you comply with the U.S. Bankruptcy Code:

1. Avoid paying back family members: Some people feel that it’s better to give their tax refund to a family member instead of paying their debt. However, this is ill-advised for a few reasons. First of all, the trustee will take the money back to fulfill your debt. Secondly, you may be accused of fraudulent activity for engaging in “preferential treatment to an insider.” It’s a lose-lose situation.
2. Hold off on luxury goods/vacations: If you’re accruing debt and heading towards bankruptcy, do not buy a new car or go on vacation. If you do splurge with your refund, the bankruptcy court may see you as dishonest and you may be charged with fraud. Also, if you purchase in excess of $675 in “luxury goods or services” from a single creditor within the 90-day period before you file for bankruptcy, there may be a claim of fraud and the debt is presumed nondischargeable.
3. No cash advances : Do not take cash advances on your credit cards. Cash advances on a credit card aggregating more than $950 on or within 70 days of filing bankruptcy are presumed to be nondischargeable.
4. Never conceal money: Hiding your money and not disclosing it during a bankruptcy proceeding is considered perjury and fraud. In addition to fines, you could face prison time.
5. Do not transfer assets to another person: You may have heard that you can protect your assets by titling them under someone else’s name. This is absolutely false. Not only will doing this result in assets being seized, you could also face criminal charges for committing fraud.

Contact Our Skilled Bankruptcy Attorneys in Denver

The moral is simple. Be honest. Tell your attorney and the court everything about your finances and make sure your schedules are complete and accurate. If you find yourself overwhelmed by debt, bankruptcy may be the answer. With over thirty years of experience and a former bankruptcy court trustee, Long & Long in Denver can help you navigate the bankruptcy system, avoid pitfalls, and gain a fresh start.