PRIOR TO FILING FOR BANKRUPTCY, THINGS NOT TO DO
Filing for bankruptcy is never an easy choice, but it can provide you with a new financial beginning. There are several steps you can take during bankruptcy to improve your chances of having your debts erased or reorganised. There are, however, several actions that you should not take because they might weaken your case.
Don’t split your financial services; keep your checking and loan accounts with the same bank.
Florida’s financial institutions are guaranteed setoff. If you have a loan from that financial institution and also keep your personal checking and savings accounts there, and you fail to make your loan payments, the financial institution can take money from your checking and savings accounts to cover the debt.
Separate banks accounts are a smart idea regardless of whether or not bankruptcy is a possibility. If you’re on the verge of filing for bankruptcy, this becomes much more crucial. Press The Restart Button.
Having an Account at Certain Banks
It is always important to safeguard your finances, even if your savings and loans are held at various financial organisations. When a bank finds out that one of its customers has filed for bankruptcy, certain institutions, like Wells Fargo, instantly freeze that customer’s bank account. Your financial situation probably doesn’t permit you to have your assets blocked while you file for bankruptcy. Determine if you need to change banks based on your research on their policies.
It’s true that you should file for bankruptcy when your debts become too much to handle. Filing at the right time is crucial, though. You must reveal all of your financial details, including the current balances in your bank accounts.
Filing while the money is plentiful gives the impression that you have enough resources to deal with your debt, which may only hurt you. On the other hand, you could be aware that you have pending deductions and withdrawals from the account to cover other bills. It would be more accurate to wait until these withdrawals have been made before filing.
Not Telling Others About Your Tax Return
Once again, you must list your tax refund as an asset while dealing with the bankruptcy courts. It’s easy to forget to mention your tax refund, even if you’ve already gotten it, but if you haven’t, you should definitely include that information.
Other Things to Avoid Before Filing for Bankruptcy
Aside from the specific actions mentioned above, there are other things that you should avoid doing before filing for bankruptcy. Here are some of them:
Don’t transfer assets: Moving property or funds to someone else’s name or hiding them in anticipation of filing for bankruptcy is a fraudulent act. This could result in your case being dismissed, losing the right to file for bankruptcy, and even facing criminal charges.
Don’t take on new debt: It’s important to avoid taking on new debt, such as getting a new credit card, making large purchases, or taking out a loan. This will not only increase your debt load, but it may also be viewed as fraudulent behaviour.
Don’t make large payments or transfers: Paying off a particular creditor or transferring assets to family or friends before filing for bankruptcy can be seen as preferential treatment, which is illegal. It’s best to wait until after filing for bankruptcy to address any outstanding debts or obligations.
Don’t ignore your financial situation: If you’re having trouble keeping up with your debts, it’s important to take action early on. Ignoring the situation will only make it worse, and it may limit your options for resolving the issue.