To begin with, you should petition for bankruptcy without delay. Even if you do not feel ready to begin your Chapter 7 or Chapter 13 payment plan, you should not wait until you are threatened with foreclosure or wage garnishment. The process by which a person typically incurs debt is incremental; therefore, the initial warning signs must be taken seriously.
Additionally, resist the temptation to engage in extensive or excessive purchasing immediately before filing. The appointed trustee will likely review your expense information between several months and two years prior to filing. The large credit transactions, especially if there have been almost no repayments, may appear suspicious, and the time required to investigate them will likely drag down your case.
Additionally, you should not transport any assets or personal property before filing. In addition, ensure that you are straightforward with your bankruptcy trustee and legal counsel regarding the state of your finances. Your attorney should have access to all relevant information so that he or she can form a clearer picture of the situation and determine how best to assist you.
The consumer bankruptcy laws require that all creditors be treated equally, so you should not repay money owed to family members or close acquaintances before filing for bankruptcy. The unpaid debt may be added to your bankruptcy schedule and paid back at that time; transferring a substantial amount of money to a family member may give the impression that you are transferring your valuable assets in order to protect them during the bankruptcy. This will be disapproved upon, regardless of whether you are filing for Chapter 13 or Chapter 7 bankruptcy, and may lead to accusations of less-than-respectable transactions.
When individuals file for bankruptcy despite having a substantial quantity of cash in their checking or savings account, this is a common error. The optimal time to file is when the account is almost completely depleted. In the event of a bankruptcy proceeding, your financial institution may lock your account and use the funds to satisfy any debts you owe to the institution. Consider transferring your finances to a different account before submitting your petition. Consult with a seasoned bankruptcy attorney if you need assistance understanding your rights, filing for bankruptcy, or determining what its requirements will be.
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