You think that you may want to go through with a bankruptcy. That’s great, because deciding what you want to do to tackle your debt is a major first step.
Once you decide that this is what you want to do, you’ll want to avoid certain transactions prior to filing. Some transactions to avoid include:
- Making payments to creditors
- Using your credit cards
- Suing
- Making large or unusual deposits into your bank account
- Transferring property or money to others
Why would you want to avoid those transactions before going into bankruptcy? It’s simple. If you do anything that makes it look like you’re trying to build up your debt and then ask to have it dismissed, you could be charged with fraud. Similarly, if you have the money needed to pay creditors, your bankruptcy might not be approved.
Transferring property can make it look like you’re trying to hide assets from the bankruptcy court, and suing just opens up the potential for a large award that the court might want you to apply toward your debts, depending on what you’re suing over.
Before you file for bankruptcy and make any major transactions, it’s a good idea to learn more about Chapter 7 bankruptcy and to talk to your attorney about how making certain transactions could affect your case. Making small transactions should be fine, but any major payments or legal moves should probably be avoided if you have time to wait.
Your attorney will go over your personal situation and talk to you about what you can or cannot do if you want to make your bankruptcy go smoothly.
