3 Mistakes To Avoid When Filing For Bankruptcy

Bankruptcy is a very serious life choice. Many people are so far in debt that bankruptcy is the best choice for their future and for their finances. There is nothing to be ashamed of if you need to file for bankruptcy, but it also shouldn't be taken lightly. Here are some things you need to avoid doing before you file for bankruptcy. If you make any of these mistakes you could be in trouble.

1. Acquiring New Debt

You must be careful about the debt that you acquire before you file for bankruptcy. Bankruptcy is not something that just creeps up on you. There will be months, even years where you know that you are drowning in debt. If you know that there is a good chance that bankruptcy is the only option for you, then you shouldn't acquire any new debt.

If the judge sees that, before you declared bankruptcy, you bought a new car, opened a new line of credit, or took out another loan, then you could be in trouble. You obviously did this without the intention of paying back the loan. Thus, you might be penalized and there is a good chance that those loans will not be included in your bankruptcy.

2. Moving Assets

Let's say that you have a good amount of assets that you don't want to lose in the bankruptcy settlement. You shouldn't start gifting off those assets before the bankruptcy to avoid losing them. This is fraudulent. If the judge sees that you have been moving assets and things around so that those assets won't be used to pay off debts, you will be penalized. Instead, leave your assets and your estate alone, even if you know that bankruptcy is inevitable.

3. Filing For Bankruptcy Right Before You Acquire Money

Some people might know that a substantial payout is coming. For instance, you might anticipate your company being bought out, or you might be included in a family member's will and know that they are about to pass away. If you know that you are coming into money, but you still declare bankruptcy, this is a problem.

Even after the bankruptcy, you will still be monitored by the judge. If they see that you came into money, the debts may not be forgiven and you might be asked to pay those debts back.

By understanding the ways you can be fraudulent in declaring bankruptcy you can avoid making those mistakes. For more help, contact a professional such as Anthony Inserra Attorney at Law.