Things You Should Not Do Before You File for Bankruptcy


 

If you are considering filing for consumer bankruptcy, you may be thinking carefully about the steps you need to take in order to get ready to file. Yet just important as the steps you need to take are the things you should not do before you file for bankruptcy. Whether you are planning to file for Chapter 7 bankruptcy or Chapter 13 bankruptcy, it is important to consider some of the common mistakes that people make when they file and to avoid making mistakes in the months prior to filing or during the bankruptcy process. The U.S. Bankruptcy Code governs most issues pertaining to consumer bankruptcy, along with Illinois laws pertaining to bankruptcy exemptions. As you are thinking about whether to file for consumer bankruptcy, you should take note of the following things you should avoid before you file. If you need assistance or have additional questions, you should seek advice from an Oak Park bankruptcy attorney as soon as possible.

 

Do Not Give Inaccurate Information

 

Most importantly, you should never provide any kind of inaccurate information when you are filing for personal bankruptcy. Whether you do so accidentally or intentionally, you could be putting yourself at risk of bankruptcy fraud allegations. Even if you unintentionally misrepresent your assets or other information, you could be putting yourself at risk of not receiving a bankruptcy discharge. When you file for consumer bankruptcy, you need to be honest.

 

Do Not Charge New Debt or Open New Credit Accounts

 

If you incur new debt on credit cards or new accounts in the three-month period prior to filing for bankruptcy, the creditor may be able to object to a bankruptcy discharge. In general, incurring more debt during this time period can be construed as “presumptive fraud”—that you knew you were going to file for personal bankruptcy, and you decided to obtain more luxury items or services in the period leading up to the bankruptcy filing. In most cases, charging food, utility bills, or other necessities will not be an issue.

 

Do Not Gift Your Assets

 

Do not gift any assets to family members or friends in the months leading up to your bankruptcy filing. Similar to charging new assets, gifting assets can be considered fraud. The bankruptcy court may assume that you gifted an asset in order to avoid having it liquidated in your Chapter 7 bankruptcy case.

 

Do Not Use Your Retirement Account to Avoid Bankruptcy

 

If you are planning to liquidate your retirement savings in order to attempt to avoid bankruptcy when you have few other assets to be concerned about, you should certainly think twice. For most people in the Chicago area, retirement accounts will be exempt (and thus will not be liquidated).

 

Contact a Bankruptcy Lawyer in Oak Park

 

Do you have questions about filing for bankruptcy in Illinois, or do you have concerns about whether you might have made a mistake that could impact your bankruptcy case? One of the experienced Oak Park bankruptcy lawyers at our firm can talk with you today about your bankruptcy options. Contact the Emerson Law Firm to discuss your case.

 

See Related Blog Posts:

What is Involuntary Bankruptcy?

Consumer Bankruptcy FAQs

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