- Do
not have more than about $100 in your bank account (or other
liquid assets, such as stocks or mutual funds) on the day
of filing for bankruptcy. Solution: time the filing so that
you file on a day when your bank account is at an absolute
minimum. Note that the court will ask that you provide a
bank statement and they will rely on the account balance
as listed in the statement, not the balance in your check
register. Taking the money out and paying your bills with
money orders will ensure that the balance is low.
- Do
not file when you are owed a substantial tax refund from
the IRS or State, because the Court will take it to pay
your creditors. Solution: File your case after you receive
your refund and have spent it. OR, if it is midyear, change
the number of exemptions that you claim on your W-4 so that
you get a larger paycheck now, and a smaller refund later.
But don’t forget to change it back the first of next
year.
- Do
not file when someone owes you money, because the Court
will collect that money and pay it to your creditors. Solution:
collect the money before you file.
- Do
not pay a relative or friend significant amounts of money
(more than about $400) within the year prior to filing bankruptcy.
If you do, the Court will contact the relative and require
them to pay it back to the Court to pay your creditors.
- Do
not transfer any assets out of your name prior to filing
bankruptcy.
- Do
not pay any unsecured creditor more than $600 in the 90
days before filing bankruptcy. Solution: delay the filing,
if necessary, to put more than 90 days between the payoff
and the date of filing.
- Do
not incur debt once you have seriously considered bankruptcy
as an option.
- Do
not charge on any card for 90 days before filing bankruptcy.
Make sure you have made at least one payment on each credit
card after the last charge made on that card. This shows
that you made a good faith effort to repay.
- Do
not file if you are anticipating an inheritance within the
next year.
- Do
not file if you are intending to sell your real estate soon.
Conclusion:
Discuss any concerns related to the above issues with Steve
or Brooke. If you think you have made one or more of the mistakes,
or have any issues related to them, make sure we know about
it, as most can be corrected.
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