Actions To Avoid Before Filing For Bankruptcy
Bankruptcy is often viewed as a last resort. People who are overcome with debts typically exhaust all efforts before even considering it. They get second jobs. They drain savings accounts. They enter into more debt while trying to catch up.
While you need to understand how to effectively go through the bankruptcy process, it is perhaps just as important to consider what not to do before filing bankruptcy. Kristen A. Stanton is an experienced bankruptcy attorney who can provide the insight and consideration you need to make effective decisions through any stage of bankruptcy proceedings.
Personal Attention Through Every Stage Of Bankruptcy
Every individual or family has struggled with unique circumstances, whether that includes divorce, unemployment, a medical issue or unexpected housing market issues. Our firm is committed to helping residents of Ohio including Napoleon and Paulding address these issues directly, never treating our clients like just another file in the cabinet.
Don’t Drain Your Retirement Savings. Work With Us.
There are many technicalities to consider when you file bankruptcy, and the petition you file must be thorough and detailed to assure your case is handled appropriately. Make sure to take the right steps and avoid common pitfalls in the process. For example, before you file bankruptcy:
- Don’t drain your retirement savings accounts: Retirement accounts are almost always completely protected from liquidation under bankruptcy. If you decide to take out money from investment accounts like 401(k)s, you will end up being taxed on that withdrawal as income and will have to pay penalty fees as well.
- Don’t take out payday loans or cash advances from your credit card company: Debt buyers and cash advances typically are coupled with outrageous interest rates. The money you receive may seem like a quick fix, but it will lead to big problems down the road. If you enter into this debt shortly before filing bankruptcy, you may be ordered to pay a portion of it back.
- Don’t pay back debts owed to a friend or family member: Financial transactions that take place prior to your bankruptcy filing are thoroughly analyzed by a bankruptcy trustee who oversees your case. Any debt payments made shortly before bankruptcy may be viewed as an attempt to defraud the government. Pay these back after your debts are discharged.
- Don’t move assets around: Any asset transfers made shortly before you file bankruptcy can be considered an attempt to commit fraud. Some people try to protect assets like a car from bankruptcy by “giving” the car to a friend or family member. Remember many assets are saved through bankruptcy exemptions so it is best to understand the rules and regulations before taking action to save your assets.
End The Financial Strain
Even if you are about to have your home foreclosed, or creditors have already garnished your wages, these actions against you can be immediately halted through bankruptcy’s “automatic stay.” At that point, all creditor correspondence goes through your lawyer and you are given the time to find a debt relief solution that works for you.