Considering Filing Bankruptcy? Here Are 5 Do’s And Don’ts To Consider

September 14th, 2010 | Posted in Debt Relief

As a result of many consultations with clients considering filing bankruptcy, I, as an Orlando bankruptcy lawyer, find myself advising people to reconsider some of their financial plans before they file bankruptcy. This should not come as a surprise, as they have come me for advice on their debt and financial issues. If they do carry out some of these plans, it could effect their bankruptcy filing negatively. So, I’ve complied a short list of Do’s and Don’ts for those contemplating filing bankruptcy.

1. DO: Disclose all of your assets and all of your creditors in your Petition

When someone files bankruptcy, they fill out a lot of paperwork known as the bankruptcy petition, which is prepared and filed with the Court by their bankruptcy lawyer. In that document, the Debtor (person filing bankruptcy), must acknowledge all of their assets and their debts. This is the core principal in bankruptcy, that everyone who files bankruptcy must provide full disclosure. Therefore, if you are filing bankruptcy, all of your possessions (no matter who purchased them originally) and all of your creditors must be listed on the petition.

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: Let your bankruptcy lawyer know about any changes in your income while you are in a Chapter 13 bankruptcy.

I view a Chapter 13 bankruptcy as a partnership between myself and my client. Since the case can last up to 5 years, we must both complete certain duties during that time to ensure the successful result we both seek. One of the client’s primary duties is to keep their bankruptcy lawyer informed of their financial situation. This means contacting your attorney not only if your income decreases, but also if it increases. Please be aware that an increase in income will not always increase your plan payment.

4. DON’T: Give away expensive assets you own before you file your case.

This DON’T might be the biggest and most important. Just re-read the statement after DON’T above, it doesn’t sound honest, does it? The bankruptcy Court certainly doesn’t believe that it is. In fact, the Court calls this FRAUD and you can get in a lot of trouble for it. Transferring any property out of your name before filing bankruptcy is just something you shouldn’t do.

5. DO: Be honest and 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 are definitely a lot more Do’s and Don’ts when filing bankruptcy, if you are considering filing bankruptcy, these 5 will get you started on your way to a successfully Discharged case.

Learn more about filing bankruptcy. Stop by K. Hunter Goff’s site where you can find an experienced Orlando bankruptcy lawyer and learn how he can help you.