What NOT to Do Before Filing for Bankruptcy
June 23, 2022
When going through financial distress, filing for bankruptcy is among the promising solutions to remedy your financial situation. However, there is misleading information out there surrounding the bankruptcy process. Without experienced guidance, someone considering bankruptcy could easily make costly mistakes that might affect their case. An experienced California bankruptcy attorney can enlighten you about what to avoid before filing for bankruptcy and help you navigate crucial decisions.
At the Law Office of Robert L. Firth, we have the diligence, expertise, and resources to advise and guide clients through the complexities of bankruptcy proceedings. Our skilled attorney is available to discuss your unique situation, explore your available bankruptcy options, and enlighten you about what to do – or not do – before you file. We're proud to serve clients across Cathedral City, Palm Desert, Palm Springs, Rancho Mirage, Desert Hot Springs, and throughout the Coachella Valley, California.
What NOT To Do Before Filing for Bankruptcy
Filing for bankruptcy in California involves a lot of complex procedures. Understanding what to do or avoid before filing your bankruptcy petition can help mitigate possible issues and make your bankruptcy case more manageable. If you're considering filing for bankruptcy in California, here are some of the things you should not do:
Don't Use Your Retirement Account to Pay Off Debts
Before filing for bankruptcy, never withdraw your retirement funds and savings to pay off your debts. Bankruptcy will help eliminate some of these debts. Hence, always consult with your bankruptcy attorney before paying off your bills using the funds in your retirement accounts. Even when you file for bankruptcy, the majority of your retirement assets and funds remain protected.
Don't Move Assets
When considering filing for bankruptcy, you may be tempted to transfer, sell, or hide some of your assets and property with friends and family members for safekeeping. Unfortunately, you may be subject to criminal penalties for transferring or selling assets before filing for bankruptcy. In some cases, your bankruptcy discharge may be completely denied. Therefore, do not move any assets if you are considering filing for bankruptcy.
Don't Acquire New Debt
Also, do not acquire new debts between 70 and 90 days prior to your bankruptcy petition. If you acquire new debts, creditors may file an "adversary proceeding" to object to your bankruptcy discharge. The creditor may argue that you took out a loan without intending to pay it back. The court may consider your actions as "presumptive fraud," and such debt may be categorized as non-dischargeable. Even if you need to take out new loans or cash advances, make sure they are for life essentials, such as clothing, food, and utilities.
Don't Misrepresent Your Information
Additionally, avoid misrepresenting information in your bankruptcy paperwork. To mitigate potential issues, only provide complete, honest, and accurate information about your assets, finances, income, debt, and expenditures. Unknown to many consumers, providing inaccurate details or intentionally misrepresenting information may result in criminal penalties, including imprisonment and fines.
Don't Fail to File Your Taxes
During the bankruptcy proceedings, the court will use your tax returns to determine your past and current earnings and property holdings. Also, your tax returns are essential documentation for filing for a Chapter 13 repayment plan. Hence, you may experience massive roadblocks during your bankruptcy proceedings for failing to file your income tax returns.
Don't File Without Legal Guidance
Lastly, ensure that you file your bankruptcy petition with detailed legal guidance from an attorney. A well-informed bankruptcy attorney can enlighten you about your various bankruptcy options, what bankruptcy can do or can't do, determine your eligibility, and when it is a good option for your unique financial situation.
The Importance of
Experienced Legal Guidance
Filing bankruptcy in California is quite complex, and any slight mistake while filing may constitute several issues in your bankruptcy proceedings or discharge process. Therefore, when considering filing for bankruptcy, it is vital that you speak with a knowledgeable bankruptcy attorney for experienced legal guidance and to help navigate crucial decisions at every step of the way.
At the Law Office of Robert L. Firth, we are committed to offering detailed guidance and reliable advocacy to individuals, families, and businesses in the legal matters of bankruptcy. As your legal counsel, we can evaluate your financial situation, help you understand your available bankruptcy options, and determine the ideal bankruptcy chapter for you to achieve debt relief.
Additionally, we will enlighten you about what to do or avoid before filing. Our trusted team will guide you through every step of your bankruptcy process from start to finish and help you make informed decisions. Also, we will craft a personalized solution to help protect your assets, mitigate potential pitfalls, and help you make intelligent financial decisions going forward.
Contact the Law Office of Robert L. Firth today to schedule a simple consultation with an experienced bankruptcy attorney. Our reliable lawyers can offer you the personalized legal counsel, support, and brilliant advocacy you need in your bankruptcy proceedings. We're proud to serve clients across Cathedral City, Palm Desert, Palm Springs, Rancho Mirage, Desert Hot Springs, and throughout the Coachella Valley, California.