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Mistakes to avoid when filing for bankruptcy

On Behalf of | Jun 14, 2021 | Consumer Bankruptcy |

Filing for bankruptcy is never a fun prospect. However, trying to skirt around bankruptcy rules never turns well. You can turn this into a positive experience so long as you avoid making certain mistakes in Chicago, Illinois.

You cannot simply give away your assets before filing for bankruptcy

Giving away things right before you file for bankruptcy is tempting. For example, you may think that if you give the car to a parent or other relative before filing for bankruptcy that you will be able to take the car back at a later date. However, not listing the car as an asset is a surefire way to raise red flags to the IRS and have your car taken from you.

Always speak to an attorney before filing

Consumer bankruptcy law gets complicated. A good attorney could help you navigate the bankruptcy process and protect some of your more vulnerable assets. In addition to helping you protect your assets, bankruptcy attorneys might help you decide if you should file for a Chapter 13 or Chapter 7 bankruptcy. Also, attorneys may be able to help you if your asset situation is a little unclear. For example, an attorney can help you decide if you should claim your child’s part-time income as an asset.

Do not take on extra credit card debt

It is possible that if you decide to run up your credit cards to the maximum limit before filing bankruptcy that you could owe your creditors money even after you have filed. As a rule, they do not consider any purchases made with your credit card three months before filing bankruptcy.

If you decide to file for bankruptcy, the best thing you can do for yourself is to clearly indicate what all of your assets are when you file. Honesty is the best policy in the long run.