Once you’ve decided to file for bankruptcy, it’s important to know how to prepare properly for your court date. But while it’s important to know what you should do during this time, it’s equally important to know what you should avoid. Here is what you should refrain from doing before your court date:
Withdrawing your retirement funds.
Many people, fearing that their retirement accounts will be wiped out by bankruptcy, try to withdraw their savings and spend them before filing. Unfortunately, this will simply result in you losing your nest egg. In most cases, you will be able to protect legitimate retirement accounts from being affected by your bankruptcy.
Running up more debts.
If you’re going to file for bankruptcy, it’s easy to assume that the money you spend now doesn’t matter. Don’t make the mistake, however, of making major purchases in the belief that they’ll be wiped out by bankruptcy. This can be considered fraud. To avoid giving the appearance of trying to exploit the bankruptcy process, you should refrain from purchasing luxury items as much as possible in the period before you declare bankruptcy.
Repaying certain loans.
You might be tempted to pay off what loans you can before filing, especially if you owe money to a friend or family member. Actually, payments on financial obligations that happen within 90 days of declaring bankruptcy may be considered “preferential transfers,” and the payment may be undone. It’s best to allow your debts to be settled by the bankruptcy process, rather than trying to pay off the “important” ones first.
If you’ve made the decision to declare bankruptcy in the Schaumburg area, one of the attorneys at Cutler & Associates, Ltd. can guide you through your case. We’ve been serving the area since 1990, and our legal team is ready to provide you with capable counsel and representation. To schedule a consultation, call (847) 961-4572.