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3 Things To Avoid When Filing For Bankruptcy

17 January 2015

Arthur Young

Filing for a bankruptcy is a major decision. It can be a helpful solution for many people to get their finances back on track and have forgiveness from the debt that they might be drowning in. If you are thinking about filing for bankruptcy, here are a couple things that you must avoid doing. They could harm your chances at being able to file.

1. Don't Get Any New Debt

In most cases, you should avoid getting any new debt about 60-90 days before you file for bankruptcy. Most bankruptcy laws say that if you acquired new debt in that time it was fraudulent, since you knew that you would not be able to pay it back. Thus, this debt that you acquired close to your filing date will not be included in the bankruptcy and you will still be responsible for the balance.

If a judge sees that you started racking up new debt right before you filed for bankruptcy, you could be in trouble. You could be punished for buying things without the intent to pay your creditors. Thus, avoid getting any kind of new debt that close to your filing.

2. Fail To File Tax Returns

Tax returns will only help you to file for bankruptcy. When the courts look at your petition to file bankruptcy, they will see what kind of income you were able to claim in the previous years. In most cases, you need about two years of tax returns when you file for bankruptcy. This will help them to track you income, progress, any major declines and any other changes you might have experienced.

If you haven't filed your taxes, you need to talk to a CPA or bankruptcy attorney right away. They can help you get caught up and let you know what your options are.

3. Don't File For Bankruptcy If You Know You Are About To Receive A Substantial Income Or Assets

If you know that you are about to come into some money through a business deal, inheritance, or some other venture, you shouldn't file for bankruptcy. The courts will track your progress after you file for bankruptcy. If they see that you inherited a lot of money right after you were forgiven of your loans, you could be accused of fraud. Instead, talk to a bankruptcy attorney to see what options would be available to you.

These are three things to avoid when you are filing for bankruptcy. Contact an attorney like one from Smith & Weer PC for more information.

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