Filing for bankruptcy can be a necessity for some who have gotten too deep into debt or have more expenses than they can keep up with. While it can be portrayed as a get out of jail free card, the process for filing is complex and it leaves a very large blemish on your credit report. However, if bankruptcy is your only option, be very careful about your financial decisions in the days leading up to your filing. Here are some of the worst things you can do right before you file:

  • Take out new lines of credit – Someone looking to cheat the system might open up and max out credit cards just before their bankruptcy, assuming that this new debt will be discharged and they won’t be held responsible. If you take out loans or use your credit excessively, it will be glaringly obvious what your intentions are. The point is, it just looks bad and you do not want to do this.
  • Stop communicating with your creditors – You might be tired of receiving calls from your creditors day after day, but communicating with them is essential if you are planning to file for bankruptcy. Ignoring your debt could mean that actions are being taken against you without your knowledge, like wage garnishments or tax liens. These matters can further complicate your bankruptcy case, so make sure you let your creditors know of your plan to file.
  • Stay in the dark about your finances or provide wrong information – One of the many pieces of paperwork you’ll be asked to fill out when filing for bankruptcy is information about your income, your expenses, and who you owe money to. If you aren’t aware of these figures, it makes everyone’s job much harder. When completing this information, willfully manipulating or falsifying the data could result in criminal charges.
  • Make last minute transactions to try to improve your situation – If you have assets to sell or private loans to repay, the last thing you want to do is take action on these items right before you begin your bankruptcy case. Both of these behaviors can be looked upon as a preferential transfer, meaning you attempted to pay back a specific family member or creditor over all of the others. Not only could you face criminal penalties for doing this, but the court could actually sue whomever you paid and ask for the money back.

Filing for bankruptcy is not something to be taken lightly, and there are a lot of questions that come up during the process. At Bankruptcy Solutions with Jeffrey Irby, we will work with you step by step through your case to ensure you get the fresh financial start you deserve.

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