Even if you’ve decided that bankruptcy might be the right option to resolve your overwhelming debt issues, it may be weeks before you have the time to file your petition. The best way to know what to do or not do during this time is to speak with a skilled bankruptcy attorney, though the following are some general tips about dos and don’ts in the time before bankruptcy.
Do – Get your paperwork together. You will need to report all sources of income, all debts, and all assets, and you will need documents to support this information.
Do – Keeping paying your secured debts. Your mortgage and auto loan will not be discharged in bankruptcy, so you do not want to fall behind.
Do – Spend your tax refund on necessary purchases. Your tax refund can possibly be liquidated in Chapter 7 bankruptcy, though you are allowed to spend it on your bills, medical care, and other necessities before filing for bankruptcy, so you don’t lose those funds.
Don’t – Make large credit card purchases. Even though you know that your credit card balances may soon be discharged, you should never make large purchases or take cash advances in anticipation of bankruptcy. In some situations, creditors may challenge a discharge if it appears you never intended to repay your debt.
Don’t – Transfer assets to friends or family. You may think you can protect property by giving it away, though a bankruptcy trustee will notice if you tried to hide property or assets.
Don’t – Start paying your unsecured debts. These debts will likely be discharged in your bankruptcy, and you should use your funds to stay on top of nondischargeable debts instead of spending them on credit cards, medical bills, and similar debts.
Contact a Memphis Bankruptcy Attorney for More Information
At the Hurst Law Firm, we assist people with every step of the bankruptcy process. If you’re struggling with debt, please do not hesitate to call 901.725.1000 or contact us online to discuss your options today.