Here are 5 tips for a smooth bankruptcy case that you can implement both before and after you’ve hired a bankruptcy attorney.
Tip #1: Have You Filed Bankruptcy Before?
If you have filed bankruptcy in the past, whether or not you received a discharge, you should immediately tell your attorney about the prior bankruptcy. This is important because it can affect how long you must wait before filing a new bankruptcy case, if you want to receive a discharge in the new case. Prior cases can affect other things, including, but not limited to, the length of time creditor must stop trying to collect debts from you.
If you’ve had a prior bankruptcy filing, your bankruptcy attorney should advise you about whether a new bankruptcy filing is a good idea for you and if so, when you should file the new case.
Tip #2: Don’t Repay Relatives Before Filing
If you are considering filing for bankruptcy and you owe money to relatives, don’t repay them before you file the bankruptcy. Instead, tell your bankruptcy attorney about these kinds of debts and ask them what to do. There are special bankruptcy rules about repaying relatives before bankruptcy and, if you do the wrong thing, the bankruptcy trustee can try and recoup the money you’ve repaid from that relative.
You may be able to easily repay that relative after your bankruptcy is finished, or in the case of a Ch. 13, during the bankruptcy. Ask your bankruptcy attorney for advice first before making any payments to relatives, to avoid any special difficulties such as the trustee wanting to sue your relative to claw back those funds.
Tip #3: Decide Whether To Keep Your Car
Whether to keep your car may be obvious to you, but it’s worth asking your bankruptcy attorney about your options. It is important to know that if you want to keep your car, and you took out a loan for that car, you must keep making all of your car payments in full and on time.
While bankruptcy gives you a break from your debts, you cannot get behind in your car payments when you expect to keep your car. If you’re behind on your car payments during your bankruptcy, then at some point, your car lender will be able to repossess your car.
If you have very high car payments or if your car is too expensive to keep due to repair problems, then discuss with your bankruptcy attorney the timing of getting rid of the car and of getting a replacement, if needed. If you’re doing a Ch. 13 case, you may be able to cram down the car loan closer to the actual value of the car.
Tip #4: Don’t give away or otherwise transfer any property
Especially before filing the bankruptcy, do not give away or transfer any property, such as real estate, a car, money, etc. If you are in doubt about whether you can, or should, transfer something you own out of your name and into someone else’s name, ask a bankruptcy attorney for advice first.
Transferring property to someone else can be a big problem that can prevent you from filing bankruptcy or get you into big trouble in your bankruptcy case. Some people naturally believe that the less they own on filing bankruptcy, the better. While that may be the case to some extent, it is far worse to have transferred something valuable out of your name just so that you didn’t own it at the time your bankruptcy was filed. This can lead to allegations of bankruptcy fraud, which will cause you a lot bigger problems than if you had never made the transfer in the first place.
Tip #5: Don’t Borrow Any More Money
Generally, you should not borrow money soon before filing your bankruptcy case. For most people, this means not using your credit cards anymore. There are detailed nuances to this general rule that you should discuss with your bankruptcy attorney, so be sure to ask for advice if you already have used credit cards recently, or if you feel that you need to do so.
If you need to discuss issues with a bankruptcy attorney, schedule a free phone consultation with attorney Jennifer N. Weil through her Setmore page or by calling (201) 676-0722.
