Bankruptcy Do’s and Don’ts!
The following do’s and don’ts should considered by any person contemplating bankruptcy.
- Provide your attorney or other petition preparer ALL information and documentation required to complete your Schedules, including your assets, debts, income and recent transfers. Accurately and completely identifying the information on your Schedules is a necessity! Failure to do so could cause many results, none of which are good: (A) your case could be dismissed; (B) your discharge could be denied; (C) certain debts may not be discharged; (D) you could face charges of bankruptcy fraud.
- Complete your credit counseling class. You must provide your certificate at the time you file. Most classes can be taken online!
- Provide information and documents requested by your trustee. Failure to provide required documentation may result in the dismissal of your case.
- Attend your 341 Hearing! While a first failure to appear will likely result in the hearing be rescheduled, continuous failures will result in the dismissal of your case.
- Complete the debtor education class. You cannot receive your discharge until this requirement is completed. The failure to do so will eventually result in the dismissal of your case.
Following the above “do’s” may not ensure that your case goes smoothly from filing to discharge, there could, for instance, be issues of dischargeability related to alleged prior actions. However, it will help to ensure that if you obtain all the relief you are entitled to under the Bankruptcy Code.
- Take on new debt or transfer property while you are contemplating bankruptcy. Recent debt may not be dischargeable and transferring property could be prohibited by the bankruptcy code. If you must transfer property, talk to an experienced bankruptcy attorney first to determine if such a transfer would be impacted by a future bankruptcy filing.
- Omit any debt, income or assets from your Schedules. (See above). You don’t get to pick and choose which debts you file on. The loan you owe to your relatives must be listed. However, that does not prevent you from voluntarily paying the discharged debt after your bankruptcy.
- Sign your Petition and Schedules without carefully reviewing them. They are submitted under oath and you are verifying the truth and accuracy of them. It is well worth your time to review them and ensure that your and your representative prepared them fully and completely.
- Stop paying for property secured by a mortgage or lien (house or car) if you wish to keep the property after you file bankruptcy. Being current on such a payment after you file essentially ensures that the lender will reaffirm the debt which will allow you to keep the property and continue paying on it.
- Make large payments to a single creditor. This can be called a “preference” and the trustee can actually get the payment back from the creditor. If the creditor is a family member, the trustee can look back 1 year for such payments. If the creditor is not a family member, the trustee can look back 90 days.
The above is not exhaustive. It is important to understand the requirements of the bankruptcy code if you are considering filing a case.
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(We are a debt relief agency, we help people file for bankruptcy relief under the Bankruptcy Code.)