If you are getting ready to file for either a Chapter 7 or Chapter 13
bankruptcy, be prepared to be completely forthcoming with
your bankruptcy attorney, the bankruptcy trustee, and the bankruptcy court
regarding all your debts, as well as all assets—or potential assets in the near
future. While it is not always easy to lay bare your entire
financial situation to others (and especially if you are in a difficult
situation), complete transparency is key in your bankruptcy so you do not
jeopardize your discharge or find yourself in hot water legally.
It is understandable that you may have cash and property you do not want to lose but if you are serious about filing for bankruptcy, consult with your attorney about your best options, creating a strategy as you pre-plan. As you do so, keep in mind these five ways to avoid fraud:
- Do not hide any information from the bankruptcy court! Even if you might be tempted to consider leaving out a few financial details, remember that hundreds of thousands of people file for bankruptcy each year and trustees are extremely adept at spotting red flags. Dishonesty at this time can result in denial of your discharge and even result in fines or jail.
- Do not transfer property or cash to family members—or if you do, be prepared to offer all the details to the trustee, who in some cases could get the money or assets back if the transaction took place up to two years before you filed. In many cases, such transfers are minor issues that can be handled with the trustee if disclosed, but cause major problems if not disclosed.
- Taking out a new line of credit before filing for bankruptcy could raise questions, especially if you make charges that you assume will be discharged in your bankruptcy (any large purchases should be avoided before filing). Also avoid repayment of any credit cards without speaking with your attorney first. The trustee may void those payments and request return of payments from creditors.
- It should go without saying but writing checks that you will not be able to follow through on paying is to be avoided. Bouncing large amounts of checks could lead to non-dischargable issues or even criminal charges, and a bankruptcy does not stay criminal actions from proceeding against you.
- Make sure tax information is correct and that it matches with the information you are sharing with the bankruptcy court. Failure to file tax returns can result in dismissal of your case.
- You probably have many questions about bankruptcy, including which type of bankruptcy will work best for you, how much you will have to sacrifice (very little in many cases), and whether you will have to go to court. Speak with a skilled bankruptcy attorney from the offices of H. Lehman Franklin, P.C. Call now to learn more at 912-764-9616, or contact us online.