Being continually weighed down by numerous debts is stressful and draining, and many people have looked to bankruptcy for financial relief. While bankruptcy is a very efficient method of getting rid of debt, there are a number of practices to both implement and avoid, and our Colorado bankruptcy team outlines everything you need to know below.
What You Should Never Do
While it is important to know what you should do, what forms to fill out, and when to file for bankruptcy, there are a number of things you should never do if you are preparing to file.
Don’t Reach Out to Your Creditor Without Legal Representation
It is no secret that your creditors are not looking out for what is best for you and your financial situation, they simply want their money, and they will do whatever it takes to make sure the odds go in their favor. Enlisting the help of an experienced bankruptcy attorney can ensure your needs and interests are looked out for during every step of the process.
Don’t Withdraw from Your 401k
401ks are typically never touched during the bankruptcy process, as they are considered exempt. If you do take funds from these accounts you run the risk of becoming liable for certain tax penalties that are unable to be discharged by the bankruptcy.
Don’t Transfer Funds or Assets out of Your Name
Any attempt to transfer ownership funds or assets out of your name is considered unlawful and extremely risky. We understand how important certain pieces of property can be, and if you would like to learn more about how to safeguard it, get in touch with our experienced bankruptcy team today.
Avoid Making Large Purchases
Whether with your credit card or taking out a cash advance, you should do your best to avoid making any large purchases directly before or during your bankruptcy case. Your case may be dismissed entirely on the basis of fraud if the court were to discover these purchases or cash advances.
What You Should Do
Keep Track of Your Expenses
Keeping track of your expenses is always a healthy practice in everyday life, but is especially useful if you are planning to file bankruptcy. As part of the process, you will be required to disclose each of your expenses, no matter the size. This includes anything from purchasing a home or car to sending a family member some money each month. The more accurate you are in tracking your expenses, the smoother the process can be.
List All of Your Debts and Assets
When you file for bankruptcy, you are not allowed to cherry-pick which debts you make a part of your case. Each debt you have must be listed in your bankruptcy papers no matter how large or small they are.
It is also important to list all of your assets as well. Everything from your appliances, furniture, and car(s) to your bank accounts and even your children’s bank accounts with your name under them. Making sure to list all of your assets and expenses can help prevent larger issues from manifesting in the middle of your case.
Keep Making Payments on Non-Dischargeable Debts
There are certain types of debts that cannot be discharged or forgiven by bankruptcy. Examples of these types of debt include:
- Child support
- Student loans
- Certain taxes
- Criminal restitutions
Even though your bankruptcy case will take away a large chunk of your debt, the debts listed above will still require repayment when your case is over, so keeping up with these payments can help keep you from falling behind again immediately following your bankruptcy.
Get in Touch With Today
The final thing you should do when filing for bankruptcy is secure experienced legal representation. At Wagner Law Office, P.C., we are committed to advocating for your best interests and finding the best path to your financial freedom.
If you would like to learn more about how we can help you get rid of debt, don’t hesitate to call our award-winning team today at to schedule your free consultation.