The decision to file for Chapter 7 bankruptcy should never come out of the blue with little to no preparations in advance. In fact, there is a certain protocol that you need to follow in the months before filing for bankruptcy.
First and foremost, it is advised to consult with a Salt Lake City Chapter 7 bankruptcy attorney in order to find out whether or not Chapter 7 is the right plan for you. If you and your attorney decide that filing for bankruptcy is the right choice, follow this protocol if you want your bankruptcy case to go smoothly with no legal or financial headaches whatsoever.
Don’t pay creditors. “Wait, what?” we bet you are thinking right now. But let us explain. While making routine payments can actually help you to qualify for Chapter 7 bankruptcy, consider what kind of payments you are making in the months before filing for bankruptcy. Any large or “suspicious” transactions to creditors could be considered “preferential transfers,” which would hurt your case. Speak to an experienced attorney to come up with a personalized plan as to which payments should and should not be made prior to filing for bankruptcy.
Do not take out a new loan. Avoid any new debts and loans in the months before filing for Chapter 7 bankruptcy, as the creditor may consider your actions fraudulent, thinking that you were never intended to pay it back and filing for bankruptcy was your excuse to not pay it back.
Avoid unusual transactions. If you are about to go bankrupt, common sense would tell you to be picky about what you buy. So avoid buying luxury goods, transferring titles of cars or business to your relatives, or removing your name from your business in the months prior to filing for Chapter 7 bankruptcy. Such actions can raise suspicions or be viewed as fraud.
Be completely honest. Even though it is required to be 100% truthful when filing for bankruptcy and providing any sort of information about your debt, assets, and financial status, do consult with a Salt Lake City Chapter 7 bankruptcy attorney before filling out any documents in order to avoid being accused of fraud and/or charged with crime.
Be smart from a legal point of view. And that also translates to: hire a skilled lawyer to represent you and provide you with top-notch legal help. You want to be smart about every move that you make before filing for bankruptcy, as even a tiny mishap or error may lead to irrevocable consequences.
Do not think that you can get away with fraud. Fraud is never tolerated in bankruptcy filings, and courts in Salt Lake City and all across Utah are very serious about punishing people for trying to get away with dishonest or illegal activities.
Before filing for Chapter 7 bankruptcy, do keep in mind that you will have to participate in a pre-bankruptcy credit counseling. Also do not forget that bankruptcy filings become public records, so there can be privacy concerns that you may want to consider.
Seek legal help from our best bankruptcy attorneys in Utah at the JMM Legal today. Get a free consultation by calling our offices at 1-801-505-9679 or fill out this contact form.