Should I File Bankruptcy?
The first step in the bankruptcy process is to schedule a consultation with a respected bankruptcy law firm. Speaking to a bankruptcy attorney allows you to ask all of your important questions related to the bankruptcy process and your assets, including whether you should file bankruptcy. For some people bankruptcy is a great option to help relieve debt. The general rule of thumb is that if you can’t foresee yourself making payments or paying back a debt in the near future then bankruptcy may be a good option for you. A chapter 7 bankruptcy you may be able to start fresh and a chapter 13 bankruptcy may allow you to make reasonable payments on your debt or stop a home foreclosure.
Here are some examples of non advisable things clients do before filing bankruptcy as listed by bankruptcy attorney Russell Demott in his bankruptcy article on the bankruptcy law network.
1. I kept paying my credit cards by using my IRA or 401(k) funds. This is a horrible idea because these funds are exempt from creditors and the bankruptcy trustee. It’s like flushing money down the toilet. And remember, you’ll need these funds some day.
2. I kept paying on a home I could not afford. These clients have been needlessly throwing away money for several months as well. Why continue paying large payments on a home you can’t afford and in which–almost always–there is no equity?
3. I paid mom back. After all, I can’t stiff my own mother! This is another bad idea. Paying mom (or dad, or other relatives) back prior to filing bankruptcy causes problems for them, which are all avoidable.
4. I transferred property into my dad’s name so I could protect it from creditors. This is a fraudulent transfer and could result in you not getting your bankruptcy discharge or getting dad sued, or both.
5. I took some cash advances on my credit cards to get by. This is yet another bad idea that could get you sued for fraud, or, at the least, delay your bankruptcy filing by several months.
6. I used my equity line to pay my credit cards. Now you’ve exchanged dischargeable, unsecured debt and turned it into secured debt, which must be paid if you want to keep your home. I’ve had clients who have done this only to come in a year or two later needing to file bankruptcy anyway.
As you can see, if you are considering filing bankruptcy, you should consider speaking to a bankruptcy lawyer, prior to taking action which you can do by calling Symmes Law Group at 206-682-7975