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36 Things Not to Do when Preparing to File a Chapter 7

May 24, 2019
  1. Don't use your credit cards after you've met with your bankruptcy attorney.

  2. Don't purchase things that may be considered "luxury" items or services.

  3. Don't take credit card cash advances.

  4. Don't use convenience checks.

  5. Don't borrow money.

  6. Don't take out "payday loans."

  7. Don't tell a creditor that you intend to pay.

  8. Don't write bad checks.

  9. Don't gamble.

  10. Don't do balance transfers.

  11. Don't pay money to your family or friends.

  12. Don't pay more than $600 on any past due bill.

  13. Don't give or gift property to anyone.

  14. Don't transfer/sell property to anyone.

  15. Don't file if your income is greater than your expenses.

  16. Don't file if you are about to receive a tax refund or inheritance. Discuss the timing with your attorney.

  17. Don't fail to list each and every bank, brokerage, credit union, and retirement account.

  18. Don't leave assets off of your paperwork.

  19. Don't fail to list money owed to you, or that you have the right to receive such as insurance claims, accounts receivables, deferred compensation, sales commissions, etc.

  20. Don't fail to tell your attorney about your small business, partnership, LLC, corporation, (even if it's a hobby).

  21. Don't purchase a home shortly before filing bankruptcy without consulting your attorney.

  22. Don't cash-out retirement plans or 401k's.

  23. Don't take out a second mortgage.

  24. Don't hide assets or debts.

  25. Don't put your money in your kids' (or parents') bank accounts.

  26. Don't omit listing a credit card balance, even if you plan on "saving" that credit card for after your bankruptcy.

  27. Don't fail to list debt to family or other "insiders."

  28. Don't fail to list debts with co-signers, like debt you personally guaranteed for your corporation or children.

  29. Don't misrepresent facts to your attorney.

  30. Don't forget to tell your attorney about liens you may have on your home or unpaid judgments (abstract of judgment), so they can be avoided.

  31. Don't make major financial decisions without talking to your attorney.

  32. Don't get married before filing if your spouse has an income. Consult with your attorney first.

  33. Don't fail to appear at State court hearings, trial or proceedings; coordinate with your attorney.

  34. Don't share unnecessary information with your secured creditors unless you're prepared to suffer the consequences, i.e., don't tip off your car lender that you're going to file bankruptcy - this may prompt them to send out the Repo Man right away. (Your bankruptcy case has to be already filed to hold them off.)

  35. Don't neglect providing your attorney's office with your up-to-date address, phone # and email.

  36. Don't bank where you owe money. Close the account and reestablish an account somewhere else. When direct deposits or electronic withdrawals are set up, there could be a lag time in getting this done (Social Security, Payday loans). If you are pressed to file, clear out the account as soon as the deposit hits the bank. Click here for more info.