3 Things to Avoid Doing Before You File for Bankruptcy
Bankruptcy is an event that you might have to go through at some point in your life, but it is not something to take lightly. It is a complicated affair with long-lasting consequences. Due to its complexity, you should proceed with caution as you prepare to file, and you should try to avoid certain things. If you are close to deciding what to do, here are three essential things to avoid doing as you prepare to file.
Rushing into It and Not Considering Alternatives
It is never a good idea to rush into any big decision in life, including bankruptcy. Bankruptcy often has beneficial results for those who use it, but it also has consequences. The goal is to make sure you receive more benefits from it than drawbacks. As you prepare for bankruptcy, you should also consider evaluating all the options you have. Bankruptcy is not the only method around for debt-relief purposes; there are others. If you want to make a wise decision, investigate the other methods and compare them with bankruptcy. You will then see the pros and cons of each and can choose the right one.
Hiding or Giving Away Assets
A second thing to avoid doing is hiding or giving away assets. If you file for Chapter 13 bankruptcy, you have no risk of losing assets. If you use Chapter 7 bankruptcy, though, you could lose your assets. To avoid losing things of value, people will sometimes try to hide them or even give them away. This is usually not a good decision. If the trustee catches you, you can end up with serious consequences. The trustee could dismiss the case altogether, and he or she could press criminal charges against you for bankruptcy fraud. Trying to hide assets is not worth the risks involved.
Finally, if you are considering going on a shopping spree before you file, you should think twice before going through with it. People sometimes think that they can go out and rack up a bunch of debt just before filing. The intention is that they would get a discharge of the debt, so why not? Doing this is also a form of bankruptcy fraud, and there are risks with this too. If you use your credit cards for necessities before filing, that is a different story.
Talk to a bankruptcy lawyer to learn more about the process of filing and the things to avoid doing beforehand.