It is surprising how often, as an Orlando bankruptcy lawyer, I wind up advising clients NOT to do something they planned to do before they came to see me about filing bankruptcy. Many times, they had a feeling they shouldn’t do whatever it was in the first place, but were coming to see me for clarification and certainty. Some of these plans, if seen through, could seriously jeopardize their bankruptcy case. I’ve put together a quick list of 5 things you should or should not do when filing bankruptcy.
1. DO: List everything you own, all of your assets, and everyone you owe money to, your creditors, on your bankruptcy petition.
Your bankruptcy petition is the paperwork they you fill out and your bankruptcy lawyer later files with the Court. The Debtor, the person filing bankruptcy, must reveal all of their assets and all of their debts in this petition. This is one of the main prerequisites when filing bankruptcy. In other words, you have to list everyone who you owe money to (including friends and family) and all of your possessions (even that old motorcycle your dad gave you).
2. DON’T: Contact the Trustee’s office if you have an attorney.
Recently I attended a “brown bag luncheon” (us bankruptcy lawyers aren’t the “wine and dine” type) with the Chapter 13 Trustee. At the luncheon, the Trustee made it very clear that if a client calls her office, only bad things could come of that call. In fact, she advised every Orlando bankruptcy lawyer to go back and tell our clients NOT to call her office. When a client calls in to the Trustee, their file immediately pops up on the screen. The person viewing that screen then looks for any little thing that may have gone unnoticed in the client’s case. Is a Plan payment a little late? Was there a tax refund that previously went uncollected?
3. DO: Always keep your bankruptcy lawyer informed of any income increases or decreases throughout your Chapter 13 bankruptcy.
When you enter into a Chapter 13 bankruptcy, it can go on for up to 5 years. Think of a Chapter 13 as a partnership between you and your bankruptcy lawyer. To reach the intended successful outcome, each party must perform their duties. One of the obligations of a person filing bankruptcy under Chapter 13 is to ensure their bankruptcy lawyer is aware of any changes in their income, whether an increase, or decrease, during the entire case. While you may be hesitant to let your bankruptcy lawyer know about an income increase, you must keep in mind that it does not always result in an increased plan payment.
4. DON’T: Give away expensive assets you own before you file your case.
This is a BIG Don’t. It just doesn’t sound right when you say it out loud does it? Go ahead, re-read out loud what comes after the “Don’t” above, I’ll wait. There, see? It doesn’t sound right because it’s not. In fact, the law has a name for the act of transferring property a Debtor owns to someone else prior to filing a bankruptcy: FRAUD. Don’t do it, no matter what trusted friend or relative is advising you to do so.
5. DO: Disclose, Disclose, Disclose
If there is one thing that every experienced bankruptcy lawyer tells their clients, and that is to disclose everything. In other words, if you are not sure whether or not you should list something in your bankruptcy petition, list it. It could be that it was not important and nothing is lost by disclosing it. Alternatively, what if you don’t list it and the Trustee uncovers it and believes you were trying to get away with something shady and misleading. If the second, you could be in a lot of trouble. So what you should take away from this DO: inform your bankruptcy lawyer about everything.
There you go, 5 quick Do’s and Don’ts to keep in mind when filing bankruptcy, or considering filing bankruptcy. Believe me, there are many, many more.
Want to find out more about filing bankruptcy? Then visit K. Hunter Goff’s site and learn how an experienced bankruptcy lawyer can help you.
Other articles you might like;