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Do Not Do These Things Right Before Filing For Bankruptcy!

Filing for bankruptcy can be a life-changing decision. When you are under immense financial pressure, bankruptcy can help alleviate some of it. The legal procedures are mostly stressful. But, the stress can be reduced with a bit of planning. 

People make some foolish mistakes right before they file for bankruptcy. While they think they are being smart, their actions put them in more trouble than before. A Las Vegas Bankruptcy attorney can help you understand what you should and should not do and represent your case. 

What not to do before filing for bankruptcy

  • Do not use your retirement money to pay the debt. 

When you struggle to pay off debt and lenders keep knocking on your door; it can be tempting to open your retirement account and pay them. However, retirement accounts are protected in bankruptcy, unlike other assets. It is not a good idea to use those funds as you will need them for your future. 

  • Do not lie about your assets. 

When you file for a Las Vegas bankruptcy, you are required to provide a detailed list of all your assets and property. Here, you need to disclose information about every asset that you own. Lying about your assets or hiding them is the worst thing you can do to your case. The biggest reason is that your lies are most likely to come out.

A bankruptcy trustee will be appointed to review your financial records, and they can catch deception quickly. Hiding your creditors won’t work either because all credit card companies have centralized and computerized information. The day you decide to file for bankruptcy, your creditors will know. 

  • Do not take new loans. 

Do not rack up any more debt once you have decided to file for bankruptcy. You may take money for things you need for your daily living, such as food, clothing, shelter, etc. If you take a big loan right before you file for bankruptcy, the creditor might raise the argument that you took the loan without the intention of ever repaying it. 

If you buy a luxury or a very expensive item off your debt money 70 to 90 days before filing for bankruptcy, you could be charged with “presumptive fraud.” Such charges can prevent your loan from getting discharged. 

  • Do not move or give away assets. 

Some people do not want to liquidate their assets, so they try to hide them by moving them to another person’s name. In this way, the court does not have any assets to liquidate to pay the creditors. However, if you do this, you could face fraud and criminal charges.

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