What Not to Do Before Filing Bankruptcy

What Not to Do Before Filing Bankruptcy Before filing for bankruptcy, you should beware of how you manage your finances as you may make some mistakes which will hold up your case, prevent debts from being discharged or even get yourself fined. Filer Beware You must keep in mind that when you file Chapter 7 or 13 bankruptcy, the court appoints a “trustee” who will scrutinize the petition and documents you submit to make sure you are not abusing the system. If the trustee approves of your filings, he will recommend it to a judge to be finalized. However, if the trustee does not approve it, he will inquire into your finances and you will have some explaining to do. What to Avoid A trustee may not recommend a petition for bankruptcy for a number of reasons; here are a few of them. If you make a big purchase like buying a 60” flat screen television or go on a lengthy vacation to Italy three months prior to filing for bankruptcy, the trustee may view this as your attempt to defraud your creditors of any remaining money you have and will not discharge your debts. Similarly, taking a cash advance on a credit card and then trying to discharge your bill in court will be seen as fraud and will prevent the card from being discharged and could lead to fines. Also, be weary of making “preferential payments” to creditors such as family and friends. Preferential payments are payments that give more money to creditors than they would have otherwise received through bankruptcy. The court will question why you gave them excess money yet are leaving other creditors with less or nothing. Again, the court views this as fraudulent and will lead to problems for your bankruptcy. If you are considering filing for bankruptcy you will be addressing many issues concerning what to avoid doing before filing for bankruptcy and should consult with an experienced bankruptcy attorney immediately in order to protect your rights. For more information regarding what to avoid when filing for bankruptcy or other bankruptcy law matters in New Jersey visit TheNJBankruptcyAttorney.com. This blog is for information purposes only and in no way is intended to replace the advice of an attorney regarding your specific matter. We are a Debt Relief Agency. We help people file for bankruptcy relief.