Filing for bankruptcy is scary, but knowing some basic dos and don’ts while helping you get through the process can make it easier.
Don’ts When Filing for Bankruptcy
Don’t postpone taking action. If you’re getting threatening letters, facing lawsuits, or in over your head, the sooner you act, the better. Waiting for it to disappear magically won’t make the situation better and may eliminate what would’ve been great options for you.
Don’t transfer your property to a friend or family member. No matter how clever you think you’ve hidden it, or how genuine your intentions for doing it, if the court determines that you are being fraudulent or misleading, they may dismiss your case entirely.
If you know you’re going to be filing bankruptcy, don’t have a last hurrah, and max out any remaining credit. Making a large purchase or buying extravagant items leading up to a bankruptcy can cast doubt in the eyes of the court that you are acting in good faith and can lead to penalties or negative consequences. In many cases, individuals are responsible to pay for any large purchases made within 90 days of the filing date.
Don’t bother selling your property before filing for bankruptcy. Chances are, it won’t actually reduce the amount you owe, and it may end up costing you more.
Don’t leave any information out when speaking with your attorney. This includes any creditors or financial information of any kind. Your attorney will advise you on what the courts need to know, but if they don’t have all of the information, it could lead to your case not getting accepted or even penalties for you.
Don’t try to pay off any debts right before filing (or make any large payments). This could be a personal loan to a family member or a friend, or even a credit card. All large payments from the previous 90 days have to be reported, so if you’ve paid a large sum to a friend, the trustee may end up taking this money back anyway.
Dos When Filing for Bankruptcy
Do contact a bankruptcy attorney as soon as you start going down this path. The sooner you reach out to Berken Cloyes, PC, the more options you may have available to you. Initial consultations are completely free of charge, and at least you’ll know what your options are so you can make an informed decision.
Do keep making payments on any cars you plan to keep so that they don’t get repossessed. If keeping your car is important to you, we can work towards an option that allows you to keep it.
Do be completely honest with your attorney. All large payments from the previous 3 months have to be disclosed to the bankruptcy court. So giving your savings over to a buddy might have seemed like a great idea at the time, but make sure you tell your attorney about it, and they can help you determine what needs to be revealed to the courts and what will and won’t work in your favor. If hidden, the court can look at it as acting in bad faith or being fraudulent, which can mean your case getting thrown out. This also goes for income as well. Make sure you tell your attorney about that side hustle or bonus you have coming up.
Our bankruptcy attorneys in Denver have more than 60 years of experience working with good people who were dealt some bad cards, just like you. Reach out today to set up your case evaluation, and let’s see how we can help.