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What not to do before or during your bankruptcy

Bankruptcy can be a process that you may not be too sure about embarking on at first. However, you should view it as a way to get a fresh start on your financial life. Many people find the freedom from extreme debt that bankruptcy can provide is a solution that best fits them.

If you have decided that a bankruptcy filing would be best for you, there are a few things you should not do right from the start that can make the process go smoother and be less stressful.

Do not feel bad – Bankruptcy may not have been the option you thought you would ever need to consider, but that does not mean you have done anything wrong. Re-organizing your finances means you are trying to adjust your life to become a proper consumer again. Instead of being overwhelmed with debt that does not ever seem to move you forward, bankruptcy has the ability once it is completed to allow you to contribute to savings accounts and get a better grasp on your future.

Do not use credit cards – If bankruptcy is in your near future, it does not mean you can just max out credit cards believing they will just be wiped away. Purchases of luxury items within close proximity of your bankruptcy will likely be deemed non-discharchable and you will be responsible for making full payment. This can slow the financial recovery you are aiming for.

Do not get a cash advance from credit cards – Just like using a credit card to make purchases for material items, a cash advance on a credit card right before a bankruptcy will likely not be discharged. Even if the cash you received was for necessities because of your financial situation, it can still be challenged by the credit card company to be paid.

Do not pay off a creditor before bankruptcy – Paying off any debts right before filing for bankruptcy, including payments to friends or family, can be construed as showing a preference. Other creditors who you are in debt to will not like this very much. This could cause the trustee assigned to the case to go to whoever you made the payment to and demand the money be put into the bankruptcy. Though it is understandable that you may want to make sure you satisfy a debt to a friend or family, having them face a trustee who demands the return of the money may be a worse circumstance.

Do not hide information – Before you begin the process of bankruptcy, you may feel a little uneasy about some debts and assets you may have and decide to hide them away. You need to disclose all your debts and assets to your attorney when filing for bankruptcy. By not doing so, you may be investigated for bankruptcy fraud which can delay your bankruptcy if it would still be allowed to progress.

If you are considering bankruptcy, do not wait to speak to an attorney who can answer any of your questions about the process. The information you receive will allow you to become knowledgeable and more comfortable about the advantages you can gain from bankruptcy.

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