Common Bankruptcy Mistakes

  • Don't pay back money owed to relatives and other family members before filing for bankruptcy relief. These can and will be considered insider payments and can be recovered by the bankruptcy trustee in your case. The bankruptcy code does not allow one creditor to receive preferential treatment to the detriment of other creditors.
  • In many cases, the debtor should not rush to file bankruptcy. In some cases it may be in your best interest to delay a bankruptcy filing. Anticipated tax refund should be considered before filing. Discuss this with your bankruptcy attorney as this will be considered a bankruptcy estate asset that may be protected all or in part.
  • Do not attempt to conceal and omit any of the assets you must list on your bankruptcy petition. Doing this will get you into a great deal of trouble and the asset you tried to hide can often be protected using a personal or real property exemption.
  • Do not transfer assets before filing a bankruptcy petition. It is never a good idea to buy, sell, give away, or in any way transfer or encumber an asset before filing a bankruptcy. The Trustee may consider this an attempt to fraudulently transfer an asset or unlawfully hinder and delay a secured creditor.
  • Answer all of your lawyer's questions completely and honestly.

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