What NOT To Do When Preparing to File for Bankruptcy in Arizona
Our bankruptcy attorney in Tucson, Eric Ollason, provides legal education, guidance, and representation for clients who are struggling financially by providing the details they need to successfully file for bankruptcy in Arizona.
Along with the “to-do” tips we provide our clients, including bringing the proper documentation and determining which types of debt can be included in Chapter 7 or Chapter 13 filings, there are also many things our clients should not do when preparing to file for bankruptcy in Arizona.
Here are a few potentially detrimental financial moves that can hurt your bankruptcy case.
DO NOT Transfer Money or Property to Other People
If you believe you own too many assets, including cash, cars, houses, or other property, and believe transferring them to a friend or family member will keep them from being included in your bankruptcy filing, that is not true.
Attempts to shed assets before filing for bankruptcy may be viewed as fraudulent activity by the court, even if you had no intention of concealing them.
Just because you have assets, does not mean that you cannot file for bankruptcy.
Also, just because you file for bankruptcy does not mean that you will necessarily lose your assets.
Speak to our experienced Tucson bankruptcy attorney to learn about your bankruptcy rights and options before attempting to unnecessarily hide anything from our law firm or the trustee’s office during a free consultation.
DO NOT Continue to Use Your Credit Cards
When financial problems have led to you considering bankruptcy, it is typically wise to stop using your credit cards right away.
Continuing to rack up debt by buying non-essential items like electronics, clothing, or any type of luxury or taking cash advances will be frowned upon by the trustee’s office and could hinder your ability to successfully file for bankruptcy.
DO NOT Deposit Extra Money Into Your Bank Account
If you are considering filing for bankruptcy in Arizona, the only money that should be deposited into any of your bank accounts should come from sources of income.
Whether it is directly deposited from your employer or a check that was written for a side job you completed, your income will be reviewed against your debt to calculate the necessary ratio for bankruptcy eligibility.
Do not deposit checks or cash relatives or friends have given you to help ease your financial strain or run any business-related financial transactions through your personal bank accounts to avoid confusion and/or the appearance of fraud.
DO NOT Pick and Choose Which Creditors You Pay
Some people work hard to get their debt under control, even when they are planning to file for bankruptcy, which can actually harm their cases.
Out-of-the-ordinary payments to a creditor that leaves your account whether it is a credit card, medical bill, or another debt completely paid off, is called a preferential transfer.
The trustee will view the payment as giving preference over other creditors that hold the same weight and may sue the creditor to retrieve the payment, so it can be distributed equally and fairly among all creditors.
This process will delay your bankruptcy filing and ultimate discharge. We can help get you there faster.
Contact Our Skilled Arizona Bankruptcy Attorneys in Tucson at Eric Ollason Today
Avoiding even small mistakes before your bankruptcy filing helps provide a smoother process, rather than one fraught with challenges from your creditors, or the bankruptcy trustee.