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Things Not To Do Before You File Bankruptcy

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It is always a difficult decision to file bankruptcy, but it can provide the fresh financial start you need. As you go through the bankruptcy process, there are many things you should do to ensure that your debt is discharged or reorganized. However, there are also many things you should avoid doing, as they could significantly hurt your case. Below, our Orlando bankruptcy lawyer outlines the things you should not do when filing.

Keep Your Banking Accounts and Loans at the Same Institution

The banks in Florida have the right of setoff. This means that if you have both a loan and your personal checking and savings account with them and you default on the loan, the institution has the right to withdraw funds from your personal accounts. Even if you are not filing bankruptcy, it is always a good idea to keep your accounts in separate banks. When you are about to file bankruptcy, it becomes even more important.

Keeping Accounts at Certain Financial Institutions

Even when your personal accounts and loans are in different financial institutions, you should make sure your accounts are not in jeopardy. Some banks, such as Wells Fargo, freeze bank accounts immediately upon learning that the account holder has filed bankruptcy. If you are filing bankruptcy, you are likely not in a financial position to have your funds frozen. Research your bank’s policies and determine whether you need to move your account to another financial institution.

Filing at the Wrong Time

You may think the right time to file bankruptcy is when you can no longer manage your debt, and that is true. However, the actual timing of when you file is important. You must provide full disclosure about your financial information, including the amounts in your bank accounts.

If you file at a time when the funds are high, it will work against you because it will seem as though you have enough to adequately manage your debt. You may know though, that automatic withdrawals and deductions are about to come out of the account to pay other bills. Wait until these withdrawals are made and then file, to give a more accurate picture of your financial situation.

Not Disclosing Your Tax Refund

Again, the bankruptcy courts require you to provide full disclosure about all of your assets, and that includes your tax refund. Your tax refund is easy to overlook even if you have already received it but even if you have not, do not forget to disclose the amount you are expecting. Disclosing the refund as well as any other applicable exemptions will help prevent it from being seized during bankruptcy.

Our Bankruptcy Lawyer in Orlando Can Provide the Legal Advice You Need

If you are considering filing bankruptcy, you need sound legal advice. At Anderson & Ferrin, P.A., our Orlando bankruptcy lawyer will advise on the most important steps to take, and prevent any mistakes being made that could hurt your case. Call us now at 407-412-7041 or reach out to us online to schedule a free consultation and to learn more.

Source:

law.cornell.edu/uscode/text/11/chapter-7

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