If you think bankruptcy may be in your future, here are a few tips on how you should handle your finances in the meantime while you decide if you should go through with the bankruptcy process.
#1 Keep Paying Everyone
The first thing that you should do is keep paying all of your debt. For example, if you owe 7 different creditors, you should keep paying all of them the minimum amount or the same amount every month. You should not pay down one creditor so that you only have six creditors left. It may seem like a good idea to pay off one creditor so that you have fewer creditors to settle with when you go to bankruptcy court. However, that is not how the courts will see it. The courts will see it as you favoring one debt over the others, and could even demand that money back from that particular business to split among the other businesses that you owe money to.
#2 Don't Make A Major Sale
Second, you should not make a major sale if you are filing bankruptcy. That means you should not sell a car or truck, or get rid of property. If you do, the courts may look very closely at that sale and make sure that you don't try to hide an asset by giving it to someone else for a low price to hold onto. They may also look closely at what you did with the money and see if you used it to pay down your debts or if you blew it on frivolous things.
The courts could require you to sell property to pay down debts, so they don't want to see you trying to get rid of all your assets right before you go through bankruptcy.
#3 Don't Overuse Your Cards
Third, you don't want to overuse your credit cards. The courts don't like to see credit card bills that get run up really high right before you file for bankruptcy. That can look bad to the court system. It can look like you ran up your credit card debit just because you expected it to be forgiven. Try to limit the use of your credit cards, and if you do use them, use them for things like groceries and gas, so the courts can see that you were just trying to get by, not trick them into forgiving additional debt that you should have incurred in the first place.
If you are even thinking about filing for bankruptcy, make sure that you are making equal payments to everyone you owe money to, don't run up your credit cards, and be careful about selling off any assets that you have.
Talk with a bankruptcy attorney like Dunbar & Dunbar for more information.Share
7 June 2017