33 Don’ts Before Filing Bankruptcy

There are lots of do’s and don’ts when you file a consumer bankruptcy case. Recently, my NACBA colleagues across the country brainstormed to come up with a short list of don’ts for people thinking about filing for bankruptcy.

Violating these, and many other do’s and don’ts, can cause you to lose property and get you into big trouble when you file for bankruptcy. If you make a mistake, even an innocent mistake, your attorney might not be able to reverse what you have done.

The best advice is not to act on your own – discuss what you want to do with your bankruptcy attorney first. You and your attorney should make your bankruptcy game plan together.

Here is the list compiled by my colleague, Jonathan Becker, of Lawrence, Kansas:

1. Don’t forget to list all your bank, checking, savings, brokerage, credit union accounts.
2. Don’t file if your income is greater than your expenses and you can pay your bills.
3. Don’t use your credit cards.
4. Don’t take credit card cash advances.
5. Don’t use convenience checks.
6. Don’t do balance transfers.
7. Don’t pay money to family.
8. Don’t pay money to friends.
9. Don’t tell a creditor that you intend to pay.
10. Don’t leave assets off of your paperwork.
11. Don’t file if you are about to receive a tax refund or inheritance.Discuss the timing with your attorney.
12. Don’t fail to tell your attorney about your small business, sole proprietorship, partnership, LLC, LLP, LC, corporation, or hobby, or your cosmetics sales.
    
13. Don’t purchase a home shortly before filing bankruptcy without consulting your attorney.
14. Don’t give or gift property to anyone; don’t accept gifts of property.
    
15. Don’t pay more than $600 on any past due bill.
16. Don’t transfer property to anyone.
17. Don’t cash out retirement plans or 401k’s.
18. Don’t take out a second mortgage.
19. Don’t gamble.
20. Don’t hide assets or debts.
21. Don’t take out “payday loans”.
22. Don’t put your money in your kids’ bank accounts.
23. Don’t omit or ‘save’ a credit card for after your bankruptcy.
24. Don’t fail to list debt to family or other “insiders.”
25. Don’t write bad checks.
26. Don’t borrow money.
27. Don’t forget to tell your attorney about liens you may have on your home or unpaid judgments so they can be avoided.
28. Don’t make major financial decisions without talking to your attorney.
29. Don’t get married before filing if your spouse has a high income.
30. Don’t misrepresent facts to your attorney.
31. Don’t run up your credit cards in advance of filing bankruptcy.
32. Don’t fail to appear at State court hearings, trial or proceedings; coordinate with your attorney.
33. Don’t hide from your attorney.Keep her up-to date with your address, phone number and email address.