“Is there anything that I should NOT do before filing bankruptcy?”

The answer to that question is YES.

There are at least 5 things you shouldn’t do immediately before filing a bankruptcy case.

Most of the time you know for several months that you are fighting a losing battle trying to keep up your bills.  Month after month you must decide which bills will wait. Sometimes you have to decided, “How far can I get behind on my car payments before they repossess my car?”

I get it.  You are suffering under a mountain of debt.  But don’t make matters worse.

If you’ve got yourself overloaded with debt remember that the United States Congress passed the bankruptcy laws for people in your situation.  Filing for bankruptcy is not an immoral decision. Quite the contrary.  The choice is really should I work for my creditors or should I work for my family.  Continuing to carry excess debt will often cost you money that you need for retirement.  It may also result in increased interest rates when you buy that next car. 

So, if you are considering filing a bankruptcy, consider these 5 Tips from a lawyer that’s filed bankruptcy cases for over 35 years.  Think of it as the do’s and don’ts of filing bankruptcy.  Mostly “don’ts.”

Don’t Engage in Unusual Transactions.

It’s ok to go ahead and make regular payments prior to filing your case.  Obviously, you’ve got to pay your utilities and food and that sort of living expense.  Certainly, if possible keep your house payment current.  It’s not good to get behind on your house payment or your car payment (if you plan to keep the car).  Never transfer money or assets to family or friends. Don’t make extravagant purchases or take big trips immediately before filing bankruptcy.  Remember that you will have to provide the last 4 months of your bank statements when you file your case.  Also avoid making large payments to a single creditor unless you do it after consulting with an experienced bankruptcy attorney.

Don’t Ignore Lawsuits.

If you’ve been sued, you should immediately contact a bankruptcy attorney.  If you let a judgment be entered against you, its possible that the creditor could record the judgment at the register of deeds office in the county where your home is located.  The judgment could become a lien on your house.  This can cause you problems even after you file your case.

Don’t Ignore Threats of Foreclosure or Repossession.

The number of payments you can get behind on your house or on your car varies for many reasons.  It’s easy to repossess your car or truck. Once you get 90 days behind, expect the creditor to attempt to repossess the vehicle.  You may have more time on your house but guessing wrong has much more serious consequences.  After all, you’ve got to have a place to live.  For most of us the house payment is a better deal that renting a place if you lose your home.  Sometimes its in your best interest to file your bankruptcy case sooner rather than later.  You can only make that decision after speaking with an experience bankruptcy attorney who you can trust.

Don’t Borrow Money on Retirement Funds.

Often people come to me after they have drained money from their retirement funds in order to try to stay ahead of the bills.  DON’T DO THAT!  It’s very difficult, dare I say impossible, to replenish your retirement account.  Know that your retirement account is exempt from the claims of creditors in almost every instance.  If you’ve got money in a retirement account don’t take it out to pay your debts.  We are all going to get older.  (I never much thought I would, but I’ve proven myself wrong.)  Consult a bankruptcy attorney before draining your retirement funds.

Don’t Borrow Money From Cash Advance Places.

Did your mother ever tell you, “You can’t get out of debt by borrowing money?”  Mine did.  She was right.  If you start trying to “just stay ahead” by going to a check cashing company, cash advance company or even a 24/7 Credit Advance (or whatever the new name may be) in order to keep afloat, you know you are heading for a bankruptcy.  It is nearly impossible for you to catch back up once you get started with a cash advance lender.

If you feel like you are heading for bankruptcy don’t try to fight the battle on your own.  Get the help of a bankruptcy attorney who has experience and is concerned about you.  Experience matters.

We filed bankruptcy cases for residents of Knoxville, Sevierville and surrounding areas.  My goal is to get your financial life in order and give you a fresh start on the road to recovery after bankruptcy.  Call now 865-246-1050 to set up the our first visit.

You might find this post helpful.  It answers the question, “How will filing bankruptcy help me?”