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R. Flay Cabiness, II, P.C. Georgia Lawyer Blog

What Actions Should You Avoid Before Filing for Bankruptcy?

There are plenty of things you need to do if you are thinking of filing for bankruptcy in Georgia, but there are also several things you shouldn’t do, too. The days, weeks, and months leading up to filing for bankruptcy are crucial, and the actions you take and do not take during this time can result in how smoothly the bankruptcy process goes for you. In some cases, your actions during this time could result in the denial of your bankruptcy.

What Do You Need to Avoid If You are Considering Bankruptcy?

It’s important to eliminate any disorder you have with your finances before filing. This can be overwhelming considering financial disorganization is likely one of the things that lead you down the road to bankruptcy.

If your financial paperwork is a mess, now is the time to get things in order and begin tracking your monthly expenses. This can help you even if you decide not to pursue bankruptcy, but it will make your life and your attorney’s work much easier if there is some organization to your financial life.

Once you have things organized, you’ll want to evaluate where you stand in terms of credit. Obviously, it might be impossible for you to stop paying for things with credit entirely, but you should avoid any excessive spending. Some people think it might be fun to go on a spending spree before filing for Chapter 7 because the last-minute debt they accumulate will be discharged. In fact, the opposite is true and if the court believes you were reckless with spending leading up to your bankruptcy, they can reject your case all together.

It’s also important to not try any “fancy maneuvering” of your assets in the weeks and months leading up to your bankruptcy. You cannot protect or hide assets by transferring them to your friends or family, nor can you turn your cash into gifts or property for them. Any actions perceived as attempts to keep money from the bankruptcy court can result in your case being dismissed.

Finally, you should not attempt to pay off any particular creditor if you are moving toward bankruptcy. This can be tough for some to understand because for months they’ve been struggling to pay their bills – now they are being told to “not” pay their bills?

You can make usual monthly payments, but you should not decide to pay a debt in full if bankruptcy is on the horizon. This is especially true for personal debts. The bankruptcy trustee has the authority to sue on behalf of your other creditors and take the money back from the recipient you deemed a higher priority than others. Paying off a debt when you are about to file for bankruptcy can backfire.

What If I Make an Honest Mistake?

You might be thinking “if my intentions are good, will it still get me into trouble?” The answer is “yes, it could.”

Your best bet is to consult with an experienced bankruptcy attorney and speak to him or her before taking any financial action. Even if you believe an action to be innocent or unrelated to bankruptcy, it can get you into trouble.

To learn more about bankruptcy and discuss with someone how important the days, weeks, and months are leading up to filing for bankruptcy can be, contact R. Flay Cabiness, II, P.C. at (912) 554-3774 (Brunswick, GA); (912) 375-5620 (Hazlehurst, GA) or; (912)-554-3756 (Jesup, GA).

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