If you are thinking about filing bankruptcy, there are a lot of things you are probably trying to remember to do, but you may not be paying attention to the things you should not do.
5 Things You Should Not Do Before Filing Bankruptcy:
- Don’t Use Credit Cards for Luxury Items
- Don’t Take Out Any Cash Advances
- Don’t Pick & Choose Loans to Repay
- Don’t Forget to File Income Tax Returns
- Don’t Hide Money or Other Assets
Don’t Use Credit Cards or Luxury Items:
If you are planning to file bankruptcy and you are thinking about purchasing something using a credit card, and you aren’t sure if you should, the answer is probably no. If you aren’t sure if an item qualifies as a “luxury” item or not, it’s safe to assume it does qualify. Unless it’s an essential or an emergency, do not consider using a credit card to make it happen.
Don’t Take Out Cash Advances:
Taking out a cash advance is an even worse decision than making a charge card purchase before filing bankruptcy. Do not take out a cash advance, do not tap into a home equity line, and do not raid your 401(k).
Don’t Pick & Choose Loans to Pay:
Bankruptcy law determines which creditors receive priority for repayment purposes. Do not attempt to pick and choose certain loans to repay prior to filing bankruptcy. Picking and choosing some loans to repay in the months leading up to bankruptcy is a major red flag.
Don’t Forget to File Income Taxes:
Do not assume that you don’t need to file your income taxes because you are filing bankruptcy. The bankruptcy court will expect to see your income tax returns during the course of the bankruptcy process.
Don’t Hide Money or Other Assets:
There are too many consumers that try to get around bankruptcy laws by attempting to hide or “gift” assets that should be included in their bankruptcy filing. Don’t give away your stuff (including jewelry, property, electronics, vehicles, etc.) to friends or relatives before filing bankruptcy. The court will likely assume you did so with the agreement that they will give it back to you later; and they will not be quick to let it go.
If you are filing bankruptcy and you have questions about bankruptcy and the bankruptcy process, please don’t hesitate to contact Ken Rannick. Most bankruptcy offices in the Chattanooga area don’t have a single Consumer Bankruptcy Specialist on staff. Our office is the only one with two. You are in good hands with Kenneth C. Rannick P.C.