If you’re considering filing for bankruptcy, you certainly aren’t alone. But bankruptcy cases can be extremely complicated and they require an experienced lawyer for your trial or mediation. If you’re planning on filing for personal bankruptcy, you’ll want to consult with an attorney or mediator right away to explore your options and decide on the best course of action for your situation.
If you are likely to go through with your filing, bankruptcy mediation can often help. A trial can add a lot of stress to an already tense time, and mediation services may allow you to avoid going through a public court case. But however you decide to proceed, there are certain actions you will want to avoid even before officially filing for bankruptcy. Here are four things not to do:
- Don’t transfer assets:
Many people mistakenly believe that transferring or hiding their assets will somehow protect them by fooling the legal system. But transferring money or property to someone else will not protect these assets and may actually get you in additional legal trouble. The court may find that by doing this, you’ve committed fraud. Around 90% of all debtors who filed for chapter 11 have less than $10 million in assets, liabilities, or annual revenues. But having assets doesn’t prohibit you from filing for bankruptcy and you won’t automatically lose them if you do. You just need to be upfront with your lawyer and disclose everything so that he or she can accurately advise you on how to proceed.
- Don’t pay back creditors or friends:
You may think you’re doing the right thing by paying back creditors a portion of what you owe or paying back friends from whom you’ve borrowed money. But beyond paying your normal bills, don’t make attempts to pay back loans to institutions. Doing so is actually not permitted. In addition, if you’ve borrowed significant amounts from friends or family, now is not the time to pay it back. If you do, you may drag them into your court case. Everything needs to be on record and taken care of according to regulations.
- Don’t keep using credit cards:
The last thing you need to do before filing for bankruptcy is to add on to your already existing credit debt. Unless you absolutely need to use a credit card to pay for the bare necessities, discontinue use immediately. If a court finds that you have very recent credit card debt, you may have difficulty wiping out those debts with your bankruptcy filing.
- Don’t provide inaccurate information:
Although it can be embarrassing and emotionally taxing, you need to be completely upfront and honest with your lawyer or mediator and the courts. Make sure to provide accurate and complete answers on all official documents and in any required meetings. If you knowingly hide or even absentmindedly forget to include an asset, your property may be taken and you could be subject to criminal prosecution. Be sure to consult with your lawyer at every stage of the process so that you’ll know what is expected of you and to go over everything that needs to be included.
If you want to find out more about mediation services for bankruptcy, please get in touch with us today.