If you’re considering filing for bankruptcy, the first step is to contact a bankruptcy attorney Plano TX who can advise you on what to do next. However, there are certain things everyone should consider before filing bankruptcy to avoid serious problems during the case.
Personal Bankruptcy Plano TX: What to Do (and What Not to Do) Before Filing Bankruptcy
Bankruptcy is commenced by filing a court case in bankruptcy court, and the case filing date is an important date. That date acts as a snapshot of your financial history, and the bankruptcy trustee will look at that date and several years back from that date to see what you’ve been doing with your money. To avoid unnecessary problems, heed the following:
- Stop using your credit cards and don’t borrow any more money from anyone. You can get in some trouble if you use your credit cards for non-necessary purchases or cash advances shortly before filing bankruptcy, as the credit card company can accuse you of fraud and sue you so you can’t discharge the debt. It’s best to go a few months without using them at all before filing. The same is true for any other debt; if you take out a personal loan and file bankruptcy a month later, the creditor can make your life miserable.
- Obtain a credit report. You can obtain one free credit report per year from each of the three major reporting agencies — Experian, TransUnion and Equifax — and you should do so before filing. You must list all your creditors in your bankruptcy paperwork, and a credit report is the best way to find most of them.
- Start gathering all your bills. Some bills, like medical bills and apartment leases, may not appear on your credit report; also, if a collections agency has taken over your account, they may not appear on the report, either. It’s best to keep all your bills so that, together with your credit report, your bankruptcy attorney Plano TX has a comprehensive list of your creditors.
- Decide whether to keep your house and your car. Whether you keep your house and car will affect your bankruptcy, especially if you’re behind on payments or if the payments are too expensive for your income.
- Do not make any large payments. If you make large payments on debts prior to filing, the trustee may go to the creditor who received the payment and get the money back to pay everyone else. You will have wasted your money.
- Do not repay any relatives, close friends or business associates any money you owe them. Just as with other creditors, if you make any payments to these “insiders” on debts you owe them, the trustee might be able to sue them to get the money back, which can damage your relationships and put your loved ones in hot water.
- Do not give away any of your stuff, including money. You may be inclined to give away your things to protect them from the trustee or your creditors, but doing so is actually a bad thing. The trustee can call this a “fraudulent transfer” and sue the recipient to get the money or property back, even if the recipient had no idea what you were doing. It’s best to keep everything and talk to your bankruptcy attorney about your options.
Bankruptcy is a big step, and planning for it is a wise choice. A bankruptcy attorney Plano TX can meet with you and discuss your financial situation to help you make the right decisions about bankruptcy. Collins & Arnove have years of experience helping individuals find debt relief. Call (972) 516-4255 now to set up a free consultation.
Collins & Arnove | Bankruptcy Attorney Plano TX | 972-516-4255