Recent Posts in Bankruptcy Mistakes Category

In order to protect an asset a person thinking about filing bankruptcy may transfer an asset out of her name and into the name of another. This can include a home, vacation home, car, boat, plan, motorcycle, or even cash in the bank.

This is a huge bankruptcy mistake.

This would be an attempt to defraud your creditors. It could result in, a denial of the bankruptcy discharge, loss of the asset, or even criminal actions.

The good news. The asset, would be bankruptcy debtors are trying to hide can typically be exempted in a chapter 7 bankruptcy or protected in chapter 13 filing. In short if you try to hide something from the Court you are risking a lot with no possible reward.

Before taking any action with your assets talk to a qualified attorney.

When contemplating filing bankruptcy, sometime individuals will max out their credit cards right before filing. This is a mistake, and could jeopardize your entire case.

Some debts in bankruptcy are non-dischargeable, meaning you will still be responsible to repay your debts even after your bankruptcy case is over. This includes luxury items charged to your credit cards within 90 days of filing. Someone may think, max out the cards and wait 90 days and then file. This too will not work.

Any debt that you ever incurred without the intent to repay is also non-dischargeable.  

By maxing out your cards you may risk the discharge not only on the maxed out cards but all your debt.

If you are thinking about filing bankruptcy stop using credits and talk to a lawyer.

Bankruptcy laws, like all laws, attempt to be fair (I admit not all laws actually are fair). In an effort to be fair to all creditors a bankruptcy debtor may not pay off one creditor in favor of another. In other words your relative cannot get all the money back you owe them and your credit card companies nothing.

Many times a bankruptcy debtor owes money to a relative and instead of listing the relative in the bankruptcy filing they pay off the loan before filing.

If this happens your case trustee or a creditor could bring a “Preference Action” against your relative in order to get back the money you paid them. This means that your relative will be sued in the bankruptcy Court and forced to repay the money.

Repaying Small loans will not likely result in a “preference action” against your relative. Also, after your bankruptcy case is over you are free to repay any creditor, including your relative.