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Prebankruptcy Planning
Planning ahead if you are considering bankruptcy is a wise idea. It's important to understand what actions to avoid in the months or even years before you file for bankruptcy -- running afoul of the bankruptcy laws can jeopardize your discharge and even land you in jail.
In addition, careful consideration of your property and available exemptions can help you keep more property. And timing your filing correctly could also prevent the trustee from taking back money you recently paid to relatives or business associates.
Planning Ahead Before You File
Planning Ahead Before You File
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Preparing for Bankruptcy: What to Do With Bank Accounts, Automatic Payments, and Utility Deposits
Your creditors should stop deducting automatic payments from your bank accounts when you file for bankruptcy, but it doesn’t always work as smoothly as you’d expect. You’ll also want to prepare for bankruptcy by ensuring you have a checking account or another bank account that will remain open after bankruptcy. And take steps to avoid a set off that occurs when your bank withdraws funds from your bank account to set off a balance owed to your bank on other debts. Your utility provider could use your existing utility deposit to set off a past due utility bill, as well, so be ready to fund a utility deposit.
What to Avoid When You Are Considering Bankruptcy
What to Avoid When You Are Considering Bankruptcy
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What Not to Do Before Bankruptcy
One of the ways to ensure a smooth bankruptcy is to learn what not to do before filing bankruptcy and avoid things that could lead to trouble. Here are some key actions you'll want to be aware of before filing for Chapter 7 or Chapter 13 bankruptcy. For instance, you'll learn why draining retirement funds, transferring property for less than what it's worth, and being less than transparent on bankruptcy forms are all actions on the "what not to do before bankruptcy" list.
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Hiding assets and cash when you file for bankruptcy is never a good idea. If caught, you won’t receive a discharge, the Chapter 7 trustee will still sell your nonexempt property, and you could pay far more in Chapter 13. After the bankruptcy trustee investigates, it's also possible to face criminal charges.
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Payments Made to Creditors Before Bankruptcy: Can the Trustee Get the Money Back?
An avoidable preference is a payment you make to a creditor prior to bankruptcy that the trustee can get back. Learn more.
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Selling Property Before Filing for Bankruptcy
Selling or transferring nonexempt property before you file for bankruptcy can be a risky proposition. Here's why.
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Recent Luxury Debts and Cash Advances: Can You Get Rid of Them in Bankruptcy?
If you file for bankruptcy, you might not be able to get rid of recent cash advances or credit card charges for luxury items.
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