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 Everyone at Moran Law Office was very kind and not judgmental.
- L.B., Warren, MI |
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Pre-Filing Mistakes to Avoid
The actions you take leading up to filing bankruptcy can drastically affect your ability to get a fresh start.
By avoiding these mistakes, you can travel successfully through the bankruptcy process.
- DO NOT USE YOUR CREDIT CARDS!
Don't use your credit cards once you have made your decision to file bankruptcy. Charges for luxury goods and services owed to a single creditor, totaling more than $500 within 90 days of filing, are presumed nondischargeable. Cash advances totaling more than $750 for all creditors within 70 days of filing are presumed nondischargeable. Don't jeopardize your "fresh start" by running up your credit cards.
- DO NOT REPAY FAMILY MEMBERS!
You cannot treat your family members any better than you would an ordinary creditor with regard to repaying debts. In fact, a bankruptcy trustee can reclaim any amount repaid to a family member within one year of filing bankruptcy.
- DO NOT LIQUIDATE YOUR RETIREMENT ACCOUNT!
Retirement accounts are generally protected. You can eliminate your debt and usually keep whatever you have in a retirement account. Many individuals drain their retirement accounts in a futile attempt to pay down credit card debt.
- DO NOT TRANSFER PROPERTY OUT OF YOUR NAME!
A bankruptcy trustee can undo a transfer of property that previously belonged to you. This can occur if the transfer was made within four years of the filing of the bankruptcy with the intent to hinder, delay or defraud a creditor, or simply if a fair price was not received.
- DO NOT MORTGAGE YOUR HOME TO PAY DEBT!
Don't take a loan against your real estate in an effort to reduce the equity. You can often file bankruptcy and not lose this valuable asset. If you take out a second mortgage to pay credit card debt, you may be putting your house at risk.
- DO NOT FAIL TO APPEAR AT COURT PROCEEDINGS!
Do not assume that you can avoid a lawsuit simply because you've decided to file bankruptcy. A collection case continues until your bankruptcy case is actually filed, which occurs only after you have met with us and provided all the necessary information for preparing the bankruptcy forms, and you have completed the debt counseling program.
- DO NOT HIDE INFORMATION FROM YOUR ATTORNEY!
An attorney can only provide advice based upon information provided by the client. Failure to notify your attorney about your assets can lead to the loss of those assets, denial of your bankruptcy case, fines, imprisonment, or all of the above.
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