Pitfalls of Bankruptcy

AVOID THE FIPFALLS OF BANKRUPTCY!

stop incurring more debt

Prior to filing bankruptcy you must stop using your credit cards. If you borrow money with the specific intent of discharging the debt in bankruptcy instead of paying it back, the debt is not dischargeable. Cash advances before bankruptcy can be seen as fraudulent and unable to discharge in bankruptcy.

Section 523 of the bankruptcy code also provides that there is a presumption that certain consumer debt created right before filing a Chapter 7 Bankruptcy is non-dischargeable. 

preferential treatment of creditors

Do not pay back money to family members or friends before filing bankruptcy.

do not give away or transfer assets

Do not transfer assets to friends, family and business associates prior to filing bankruptcy in an attempt to conceal those assets from your creditors. The transfer may be considered a fraudulent. If it is deemed fraudulent, you may lose both the property and your right to a bankruptcy discharge.

Carefully choose the creditors you pay. some creditors, such as landlords, secured creditors, and some utilities should be paid under most circumstances. If you pay a credit card debt that eventually will be discharged, you may be throwing money away.

These blog posts are not intended nor shall it be deemed to be the rendering of legal advice. Reading these blog posts does not create an attorney-client relationship, nor shall it impose an obligation on the part of the attorney to respond to further inquiry. Contact the Dunaway Law Group at 480-389-6529 or message us HERE.