Things to Avoid Before Filing Bankruptcy
Although bankruptcy is often a last resort, the process does have many benefits for those who are struggling with debt they cannot repay. Bankruptcy provides borrowers with a clean financial slate, allowing them to discharge their debt and get a new start. Before filing bankruptcy, there are many steps to take to ensure you are prepared. Likewise, there are many things you should avoid doing before filing, as these can significantly hurt your case. Below, our Orlando bankruptcy lawyer advises on the things to avoid before filing.
Keeping Your Bank Account at the Same Institution You Have a Personal Loan
Even if you are not filing bankruptcy, financial institutions can withdraw money from your bank account to cover a loan if it is with the same bank and you fall behind on payments. Financial institutions have the right to do this. It is known as the right of setoff. They also do not have to notify you that they are withdrawing the funds. Regardless of whether you are filing bankruptcy or not, it is always wise to keep your personal accounts and loans at separate institutions.
Keeping Your Bank Accounts at an Institution Known for Freezing Them
Some institutions are fairly well known for freezing bank accounts of customers who file bankruptcy, particularly Chapter 7. Wells Fargo, for example, is one of these. Financial institutions may do this even if you do not owe them debt and it can create long delays in your bankruptcy case. Always research any financial institution before keeping your money there and before you file bankruptcy, in case you need to move the funds.
Filing When Your Bank Account is Artificially High
An artificially high bank account can make it difficult to discharge your debts in bankruptcy even if you will soon lose those funds. For example, your paycheck may be deposited into your bank account. If you file right away, you will have to disclose the full amount even though you still have to pay all of your monthly bills. Always ensure that you have paid any bills you need to and that your account is not artificially high when you file to give you a better chance of success during bankruptcy.
Relinquishing Assets Just Before Filing
Selling, transferring, or giving property away just before you file bankruptcy may be viewed as bankruptcy fraud. The courts may believe that you are trying to minimize the amount of property you own before filing bankruptcy. For at least six months, and preferably one year, do not transfer any of your assets before filing bankruptcy.
Our Bankruptcy Lawyer in Orlando Can Help You Avoid Mistakes
The above are just a few things you should avoid before filing bankruptcy. At Anderson & Ferrin, P.A., our Orlando bankruptcy lawyer can help ensure you avoid other common mistakes and take the necessary steps so you are fully prepared for the process. Call us now at 407-412-7041 or contact us online to schedule a consultation and to learn more about how we can help.
Source:
uscourts.gov/court-programs/bankruptcy/bankruptcy-basics
