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Item Description – Bankruptcy is lengthy and complex. It’s something that should be done when no other solutions are available. Even before you file, you should be cautious about how you spend money and handle finances. The following list outlines 15 things that you should never do before filing for bankruptcy.Don’t Ignore Debt Collector Calls or Notices – Many debtors don’t want to deal with debt collectors. Ignoring these calls or notices can be detrimental. If you haven’t responded to attempts to contact you, the collector will be more likely to attempt repossession, foreclosure, or to begin wage garnishment. It’s better to make an effort to negotiate with creditors before they escalate. This may give you an opportunity to come to an agreement that is financially manageable for you.Don’t Abandon Your Home – If you abandon your home before filing for bankruptcy, then you could lose the homestead exemption. That means your home can be taken in the process. The homestead exemption is intended to help debtors keep their place of residence so that they aren’t left homeless if their assets are sold.Don’t Skip Filing Your Income Taxes – Keep your taxes up to date. This is especially important if you are declaring Chapter 13 bankruptcy. Taxes are used to determine monthly payments. The court may dismiss your case if your taxes are not filed. All current taxes should be paid on time as well.Don’t Drain Your Retirement Account – You may be tempted to rely on your retirement account as a short-term solution to pay debts or stay afloat. Don’t do this. Your retirement funds are exempt when seizing assets during bankruptcy. If you withdraw money, creditors will be able to access it.Don’t Ignore Lawsuits – Do not ignore any lawsuits filed against you. Credit card companies may sue you. If they do and you do not show up, they can win by default. Doing so can give them access to your assets or wage garnishment. Respond to any lawsuits you receive. It is best to talk to a bankruptcy attorney for advice if you are sued.Don’t Pay Friends and Family – It may seem like a nice gesture to repay family or friends or give them your cash or property to cover loans before you file. Don’t do this. The court may see it as preferential treatment and could reverse the payment, taking it back from the recipient.Don’t Make Preferential Transfers – Family and friends aren’t the only ones who can receive preferential transfers. If you make unusual payments to any creditor, it could be considered a preferential transfer. This can lead to a clawback lawsuit. In this situation, the trustee may sue the business or individual that you paid to retrieve the money.Don’t Give False Information – Never under any circumstances intentionally give false or inaccurate information. This rule is important whether you’re applying for credit, negotiating with creditors, or dealing with the court. If you commit perjury, you could be subject to fines of up to $250,000 and 20 years in prison. If you don’t file all the necessary documents, your case may be dismissed, or you may miss a debt that doesn’t get discharged.Also, remember to be honest and upfront with your bankruptcy lawyer. They need all the facts to provide the best recommendation based on your situation.Don’t Transfer Property or Money – Some debtors think that they can hide assets or funds by transferring them to a friend or family member. Do not do this without consulting your bankruptcy lawyer first. Intentionally doing this is considered fraud.Do Not File Lawsuits – If you make a legal claim, it is considered an asset and could be seized by the court. This can happen even if the case is unresolved when you file. A claim made against another person before you file it with the court can also be considered part of the bankruptcy estate. This is another situation where you should consult an attorney before doing anything legal or financial to minimize potential losses.Don’t Make Unusual Bank Deposits – Avoid making any unusual bank deposits. This would be an amount that you don’t normally receive as part of your salary or wage. It could be anything from a payment from an acquaintance to a business transaction.Don’t Incur Debt That You Can’t Repay – Just because you plan to have debts discharged through bankruptcy doesn’t mean you are safe to incur more debt that you can’t pay. Creditors will receive a bankruptcy notice. If they believe that you intentionally ran up debt that you knew you couldn’t pay, they can challenge your request.You could end up still having to pay creditors that can prove you took on debt in bad faith. In most cases, credit purchases made within 90 days of filing are not included, which means you cannot discharge them and will be responsible for paying. You could also be accused of fraudulent borrowing.Do Not Accept Future Payments – If you expect to get a payment in the future, it is best to not accept them right now. That can include a bonus earned at work, inheritance, or tax return payment. Future payments are considered a part of your bankruptcy estate and can be taken to pay debts. Your bankruptcy lawyer can discuss the situation and let you know how to handle future payments.Do Not Finance a Vehicle – As a general rule, you should not take on more debt right before filing for bankruptcy. In some cases, your new vehicle may be taken to pay your creditors. Several factors will be considered, including the condition of your current vehicle, if you finance the purchase, and the type of bankruptcy filing you submit.Your bankruptcy exemptions will determine if the purchase is safe when filing Chapter 7. Most states have an exemption that protects a certain amount of vehicle equity. Your bankruptcy attorney can provide information specific to your area and case.Don’t File Bankruptcy without a Lawyer – You are not required to hire a bankruptcy lawyer, but it is highly recommended. There are potential obstacles that could hurt the outcome of your case. A professional can provide valuable insight and ensure that you cover all creditors and have the necessary documentation and information needed.This is especially true for more complex cases or those involving higher dollar amounts. The best thing to do is to schedule an initial consultation. A lawyer can guide you through the process, help you avoid setbacks, and prepare you for likely outcomes and expectations from the court and creditors.Finding a highly-rated bankruptcy attorney in your area is easy. Visit Bankruptcy Directory to connect with lawyers who are ready to help.

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