If you have found yourself in a financial predicament caused by a recent
divorce, the loss of a job, or high medical bills, you might already be
mulling over the idea of filing for
bankruptcy to eliminate your debts. However, you should be careful when navigating
these financial waters as there are some decisions that have the potential
to harm your bankruptcy case, which you should be aware of. It is crucial
to avoid making these mistakes, lest you make a bad situation worse.
Transferring Assets: A commonly held belief is that if you transfer assets, such as houses,
cars, or cash to relatives or other individuals who might shield it for
you, it means that those assets will be safe from bankruptcy proceedings.
Doing so not only provides no protection, but might also get you into
trouble with the court, and may be perceived as fraudulent. Filing for
bankruptcy does not mean you will lose all of your assets and many are
actually able to keep them, so hiding them is unwise.
Paying Off Some Creditors: If you think paying off some of your creditors will improve your chances
at obtaining a bankruptcy, you are mistaken. Making a payment to completely
settle debts with certain creditors and not others is known as a preferential
transfer and will ultimately delay your case and jeopardize your bankruptcy.
Using Credit Cards: One of the first things you should do if you are having financial problems
and considering bankruptcy is to stop using your credit cards or take
out any cash advances against your credit cards. You can continue to use
a debit card that is connected to your bank account to pay for purchases.
Deposit Extra Funds Into Your Bank Account: Money deposited into your bank account should only come from sources of
income and not checks from friends or extra money you have been holding
onto. While friends or family might want to help you, you should not accept
cash or checks to deposit until you are able resolve your financial issues.
If your source of income is a business, keep business transactions separate
from personal accounts to avoid confusion.
Filing Lawsuits: When you file a lawsuit, your assets, which includes current and future
payments awarded from a lawsuit, are transferred to the bankruptcy court.
As such, you might not receive money awarded to you, even if your case
is unresolved, or the award has yet to be determined. Some states have
exemptions regarding how much they are allowed to take, while others do not.
Accepting Future Payments: All payments you expect to receive in the future are part of your bankruptcy
estate and, therefore, your bankruptcy trustee can seize future money
for the purpose of repaying your creditors. Future payments include tax
refunds or inheritances, depending on when it is received.
If you are currently considering bankruptcy and are unsure how to proceed,
an experienced bankruptcy attorney can help guide you through your situation
and ensure that you do not make any unnecessary mistakes that could cost you.
Bankruptcy Lawyer in Jacksonville & St. Augustine
If you are struggling to pay your bills and are overwhelmed by mounting
debt, you do not have to continue to endure this on your own. At Albaugh
Law Firm, we believe there is always a solution to life’s biggest
problems and are here to help you take the steps to find it. Our bankruptcy
attorneys have been helping clients attain debt-free futures for over
60 years. Let us help you.
Call our legal team today at
(904) 637-1839 for a free consultation.