If you’re thinking about filing for bankruptcy, you may have heard some things that may make filing for bankruptcy easier or may better prepare your finances for the process of filing. However, not all of these things are in your best interest. Here are three things you absolutely want to avoid doing if you think bankruptcy may be in your near future.
1. Transferring Assets
One of the biggest mistakes a person considering bankruptcy can make is transferring their assets before filing. Many people mistakenly believe that doing so protects their home and savings or checking account assets. But in reality, unless the transfer was made a while ago, the court will still consider you to be the owner of those assets. This is true even if they are technically in someone else’s name. Additionally, it’s possible the court may look at these transactions as being fraudulent.
2. Making Large Payments to Creditors to Settle Debts
Often, people think that paying off a few creditors to go into bankruptcy with less debt is a good thing. However, it can actually turn out to be quite the opposite. Avoid paying off debts that would likely to be discharged in a bankruptcy anyways, like credit card or medical bills. Doing so could be a waste of money and could cause the court to believe you may have unlisted sources of income if you were able to make large, out-of-the-ordinary payments right before bankruptcy.
3. Continuing to Use Your Credit Cards
If you’re going to be getting your credit card debt discharged in a Chapter 7 bankruptcy anyways, why not max out your card so you can get the most out of your bankruptcy? Unfortunately, it doesn’t quite work that way. Many people advocate this, but it honestly could not make your case look worse. Chances are, the bank will find that credit card charges within a certain time frame are not dischargeable, meaning you will still owe the money anyways. And in some cases, continuing to use your credit cards may cause you to become ineligible to file for bankruptcy altogether.
Contact a Tyler Bankruptcy Lawyer Today for More Information
The only things you should be doing prior to filing for bankruptcy is what an experienced Texas bankruptcy attorney has instructed you to do. Contact the Law Office of Howard Tagg today to learn more about your options and how moving forward with a bankruptcy may be in your best interests. Call now for a consultation at (903) 730-6366.