4 Lessons On Smart Preparation For Your Plans To File Bankruptcy

23 August 2016
 Categories: Law, Blog


Are you strongly considering filing for bankruptcy? If so, there are a number of things that must be done to get the proceedings underway. Perhaps you have done research on filing for bankruptcy and the different types of bankruptcy options that are available. Despite your research and best intentions, you may be unaware that there are some behaviors and actions that can hinder your bankruptcy case. 

Moving Assets

This type of behavior may be viewed by the bankruptcy court as an attempt to hide assets. Perhaps you plan to transfer an asset you have such as a vehicle to a family member, but this action may still be scrutinized. It is also possible that your actions could be reversed if they are discovered. This means that the assets could be repossessed or seized. 

Only Paying Certain Debts

Paying certain debts could be viewed as an attempt to retain certain property or accounts and dismiss others. Unfortunately, this is a complicated portion of these proceedings, and by filing for bankruptcy, you are waiving your right to choose which debts you want to keep and which ones you want to "throw to the wolves." There may be certain exceptions when it comes to houses and vehicles. For example, your bankruptcy proceeding may result in you being able to keep your main source of shelter and transportation. 

Not Filing Taxes

Tax returns are important because they are legal documents that prove income. When people who wish to file bankruptcy do not file tax returns, it may be difficult for the court to prove their incomes. You may also find that you are penalized by the IRS as well as scrutinized by the bankruptcy court. Both agencies may view your actions as though you are attempting to conceal facts. Keep in mind that if you file your taxes after you file for bankruptcy and are due a refund, the money may be intercepted and used in your bankruptcy case. 

Splurging and Creating New Debt

While it is great that you want to finally get rid of your debt and start fresh and new, this is not a time to go and splurge in an attempt to get some freebies in the process. Creating new debt is irresponsible, and you may find that certain items might be listed as assets in the case, which means you may not be able to keep them. It is also possible that new debts might not be discharged, which means you would still owe these creditors. 

A bankruptcy attorney is an excellent resource to use if you have questions about ensuring that you can file a case in as expeditious a manner as possible. These cases are complex in nature, and some laypersons find navigating the legal system frustrating and frightening. By retaining a lawyer, you can keep those emotions under control and have peace of mind that the process is going forward following the guidelines of the law. 

For more information or assistance, contact a bankruptcy attorney, like one from O'Brien and Dekker Attorneys at Law.