Things to Avoid Before You File Bankruptcy

Bankruptcy should only be a last resort but for those who are struggling to pay their bills and other expenses, it can provide a great amount of relief. There are different types of bankruptcy and the steps you take to prepare will depend on whether you are filing Chapter 7 or Chapter 13 bankruptcy. However, just as there are things you should do before you file bankruptcy, there are also certain things you should avoid doing. Below, our Orlando bankruptcy lawyer outlines what these are.

Use the Same Bank for a Daily Use Account and a Personal Loan 

If you use the same bank for your checking or savings account and a personal loan and are ever unable to repay the loan, the bank has the right to withdraw money from your account to repay the loan. They are not required to provide you with notice before they do this. It is known as the right of setoff. Even if you are not going to file bankruptcy, it is not recommended to do your banking and borrowing at the same institution.

Choose a Bank that is Not Bankruptcy-Friendly 

Some banks are known for freezing the accounts of people who file bankruptcy. Wells Fargo is a well known example of this. Even if you do not owe money to the bank, they may still freeze your accounts as soon as you file bankruptcy. Before filing, research different banks to determine if your account will be at risk after you file.

Choose the Wrong Filing Date 

There are times when your bank account may be artificially high. For example, you may have just gotten paid, leaving you with a fairly large balance. Even though you know that you have bills and expenses coming out of the account, you must still fully disclose the current amount in your account. This can have a negative effect on your bankruptcy case, particularly when exemptions are applied to protect the funds.

Forgetting to Include Property in Your Name 

During bankruptcy, you must provide full disclosure about all of the assets that are in your name. If you fail to do this, not only will it negatively impact your case, but you could face additional penalties, as well. It might also be easier to forget certain assets even if they are in your name. For example, you may have bought your child a car. You do not consider the vehicle to be yours because you do not drive it. Still, if it is in your name, it is legally yours and forgetting to disclose the vehicle could also result in serious penalties.

Our Bankruptcy Lawyer in Orlando Can Help You Avoid Penalties 

Unfortunately, the above are just a few mistakes you may make before filing bankruptcy. To avoid making any errors, call our Orlando bankruptcy lawyer at Anderson & Ferrin, P.A. before you file. We will help you prepare all of the necessary paperwork, provide the legal advice you need, and help you through the process to ensure your case proceeds smoothly. Call us today at 407-412-7041 or contact us online to schedule an appointment and to get the legal representation you need.

Source:

uscourts.gov/services-forms/bankruptcy/bankruptcy-basics