Mistakes clients make.
Moral of the story: Don’t make financial decisions in a debt crisis, consult a professional first.
There are things that you might consider doing to resolve your financial problems on your own that can make your situation much worse.
Don’t give away valuable possessions. Transferring assets out of their name in the hope of protecting them. I not talking about a legitimate sale of something you own for a fair price – that’s OK. If you have a car worth five thousand dollars and you sale it for four thousand dollars that is a legitimate sale. But – If you give away an asset or transfer an asset for a lot less than it is worth, you and the person you transferred too may get in trouble. Giving away assets or selling them cheap to friends or family is called a Fraudulent Transfer.
The transfer can be reversed. The asset can be recovered from the transferee and title put back in your name. Then it will be taken from you and sold to pay your creditors.
We urge that you do not sell or transfer assets out of your name unless you consulted with us first. We will need to advise you as to what are legitimate transfers and what might be a Fraudulent Transfer.
Don’t repay family members or favored creditors. Another thing you can do to hurt yourself and others is to repay debts that you owe to family or friends. It seems natural and fair to pay debts to your family over other creditors, but it is a problem if you file a bankruptcy case. If you make payments to a family member within a year of filing a bankruptcy they may be considered to have received “preferential treatment “over your other creditors. If you have chosen to pay your family over other creditors then both you and they may have a problem. The problem is that the bankruptcy trustee will look for things like this. If you have transferred assets to your family you will be asked under oath to reveal that information. If you choose not to reveal the information you have committed a felony. If you do the information your family member may be told to repay the money.
I assume you do not want your family members involved in your bankruptcy case. Therefore, do not transfer assets to them. Do not pay back debts to them unless you have consulted with us to make sure what you are doing is legitimate.
Don’t use retirement funds to pay off debts. We also recommend you never consider spending money out of pension plans to solve debt problems. You make exhaust yourself of one of the assets you need when you retire. Pensions and retirement plans are normally protected assets which you can expect to keep in a bankruptcy case.
Don’t commit a felony! The worst thing a person can do is to hide assets and fail to disclose them in their bankruptcy schedules.
DO NOT ASK US TO HELP YOU COMMIT A CRIME!
That will also get you kicked out of bankruptcy and you get no discharge or fresh start.
You must disclose all of your assets. If you cooperate with the system and do not take any actions to have your motives questioned, we can get you through a bankruptcy case without making it an ordeal for you or your family members. Contact Us we are here to help. You can find additional information about your protections by visiting our online Bankruptcy FAQ’s