Common Mistakes Before Bankruptcy

Filing for bankruptcy is not inherently a difficult process. However, many people don’t understand the process enough before attempting to enter. This limited knowledge of the process results in people accidentally complicating the process prior to filing. Before you file your paperwork there are a few things you should know to avoid any actions that may complicate the bankruptcy process.

Financial Matters

There are rules regarding how long financial activity should be suspended before filing for bankruptcy. The court may not accept certain debt charges that occur just prior to the bankruptcy filing. This is a common mistake made by  many people who assume they can accumulate more debt prior to filing in hopes of having it all discharged. Not only may this action be viewed as fraudulent, it may result in the entire case being dismissed. In general, purchases over $550 on a credit card within 90 days of filing for bankruptcy or taking a cash advance of $825 or more from a credit card within 70 days of filing will not accepted.

Property Matters

The biggest fear most people have is losing their assets during the bankruptcy process. It isn’t uncommon for people to attempt to hide certain assets to prevent these assets from being at risk for liquidation. This action may also be considered fraudulent and lead to the case being dismissed.  It is important that no information about assets is withheld in the filing. Further, transferring assets to a friend or family member prior to filing will not be tolerated in a bankruptcy case.