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Ten Bankruptcy Don’ts

Ten Bankruptcy Don'ts | 770-609-1247 | Bankruptcy Lawyers Cumming GeorgiaFiling a Cumming Georgia bankruptcy case can provide great financial relief for the honest but unfortunate debtor.

To quote Federal Bankruptcy Court Case Law, which is applicable to all cases filed in Cumming Georgia:

The principal purpose of the Bankruptcy Code is to grant a ‘fresh start’ to the ‘honest but unfortunate debtor. Marrama v Citizens Bank of Massachusetts, 549 U.S. 365 (2007)

We have been careful to explain that the Act limits the opportunity for a completely unencumbered new beginning to the ‘honest but unfortunate debtor.’ Grogan v Garner, 498 US 279 (1991)

However, there are checks in place to ensure that relief is provided to those who truly cannot otherwise stay afloat. That being said, there are critical mistakes you should avoid making right before filing a bankruptcy case in Cumming Georgia or any other jurisdiction. While uncommon with the vast majority of cases filed by honest people with experienced Cumming Georgia bankruptcy attorneys, the court can dismiss a case under 11 U.S. Code § 707 for good cause.

If you cannot avoid doing one of the things listed below, you should let your Cumming Georgia bankruptcy attorney know so that they can decide how best to proceed.

1. DON’T go on a shopping spree. Using credit, incurring debt and spending what little money you have left can only cause problems in a bankruptcy case. Usually the problem stems from a creditor objecting to their debt being discharged due to very recent purchasing of luxury goods on a credit card.
2. DON’T incur any additional debt or borrow money. Keep your expenses at a minimum so that you can give a realistic picture on your petition. Do not borrow money from family or friends without speaking with your attorney about the possible consequences and reasons.
3. DON’T loan or give money to friends and family, especially with intent of liquidating or hiding your assets before filing a bankruptcy case. While it is acceptable to give your spouse grocery money, do not transfer or move large sums from your bank account into anyone else’s. If you have done this, you will need to discuss with your bankruptcy attorney so that the matter can be addressed as a part of your bankruptcy case.
4. DON’T sell or give away your property or other assets before filing bankruptcy. The trustee or your creditors may allege that you were trying to hide assets to defraud creditors. In addition, the trustee can file an action with the court to “reverse” the gift of property assets, essentially undoing the transfer. However, this would usually only be done if the assets is of significant value. If you have done this, discuss with your bankruptcy attorney so that the matter can be addressed as a part of your bankruptcy case.
5. DON’T transfer automobile titles to family or friends. People frequently get worried they will lose a car as a part of filing a bankruptcy case. This fear is usually unfounded, and the transferring of a car to another person before filing bankruptcy can only make the situation worse. For example, once a car is transferred to another person no bankruptcy exemptions can be applied to the equity in the car. And the bankruptcy trustee can easily discover transfers of cars in a case and you are required to disclose this information on your bankruptcy petition.
6.DON’T leave anything off of the Georgia bankruptcy paperwork. You should be completely honest and provide all of the necessary documentation to support your petition. The bankruptcy petition is signed by the filer in several places affirming its accuracy. While no bankruptcy petition is perfect, intentional and substantive omissions can cause significant problems in a bankruptcy case.
7. DON’T leave creditors off of the paperwork because you want to keep a credit card or do not want someone to know you have filed. It has been our experience that leaving creditors off of bankruptcy petitions is a frequent source of problems during a bankruptcy case and even years afterwards. If you are a business owner, but you are filing a personal case, you should still list ALL of your business creditors and vendors on your personal case, whether you are sure you have a personal guarantee or not.
8. DON’T continue to bank where you owe money without discussing with your attorney. While it is usually not a problem, sometimes it can result in your account being frozen by the bank once they learn you have filed bankruptcy. While this is not common, certain banks more frequently do this than others.
9. DON’T lie – this includes withholding the truth. Tell your attorney everything up front; this will help your case in the end. Withholding information from your bankruptcy attorney can prevent her or him from filing your case in a way to mitigate the issues. Also, when you meet with the bankruptcy trustee, even though it will be a short meeting, you will be asked questions under an oath to tell the truth.
10. DON’T borrow from or withdraw 401k, IRA, and ERISA qualified savings and retirement plans to pay creditors. Most qualified retirement and savings plans are protected in a bankruptcy case and can be preserved in a bankruptcy case while the creditors are discharged.

If you are facing a personal or business bankruptcy in Cumming Georgia or Forsyth County, call us at 770-609-1247 to speak with one of our experienced and professional bankruptcy attorneys. Contact >

 

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