What to Avoid before Filing Bankruptcy?

BankruptcyThere are many actions a person thinking about bankruptcy should avoid. The most obvious is to not incur new debt. Buying a new vehicle, using your credit cards prior to filing bankruptcy, getting voluntary medical procedures like plastic surgery, and taking out payday loans greater than $825 with the intent to file bankruptcy is fraud and can be punishable by jail and/or a fine. It is very important to not incur new debt prior to filing for bankruptcy.

An important financial transaction to think about is paying family members back money the year prior to filing bankruptcy.There is a one-year look-back period for what is called an insider, aka family member. If you have paid back any loans to family members in the year prior to filing, it is important you disclose this to your bankruptcy attorney.

This doesn't include borrowing money and then paying your family back within a month. Instead, this includes ongoing payments to family to pay back a loan. You may have to wait to file for bankruptcy until the one-year look-back period has ended or the money paid back to family is insignificant.

If you owe money to the bank where you have your checking and savings accounts at, it is recommended that you close your bank accounts and go to another bank. You do not have to tell them you are filing bankruptcy. This is recommended especially if you bank at a credit union. Credit unions can have liens on your bank accounts, and they can freeze the accounts. It is easier and will cause less stress to go to another bank.

To learn more about what you should do before filing bankruptcy and to find out if bankruptcy is the best solution for you, contact the knowledgeable Seattle, WA bankruptcy attorneys at the Law Offices of Jason S. Newcombe. Call us or request an appointment today.

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