It is illegal to premeditate a bankruptcy. This means that any spending done with a future bankruptcy filing in mind will suspend the debt from being discharged. In plain English:
You can’t buy a buy a bunch of stuff, rack up debt and then file for bankruptcy and wipe out all the debt.
It’s not hard to look at spending history and figure out that some planned spending recently occurred previous to a bankruptcy filing. Bankruptcy courts may review the past 3 months of bank statements and other accounts to make sure there wasn’t any spending done that seems planned around a bankruptcy. If there are some suspicious spending events in your accounts, you may be asked about them and they may be deemed unable to be discharged in the bankruptcy.
Prepare for Bankruptcy
Although you can’t plan spending before a bankruptcy filing, you can plan around other expected events that have a good possibility of happening when you file a bankruptcy. Here are a few things that you can do to prepare for bankruptcy.
1. Check with your banks and credit cards to see what they will do when their clients file bankruptcy
After a bankruptcy is filed, some banks will completely freeze your account, no matter if you have debt that is getting discharged in a bankruptcy or not. Other banks will let your account function normally. You can easily find out what your bank’s policies on this are by calling their customer service line ahead of time to find out what to expect if an active bankruptcy is engaged.
2. Keep statements of the accounts your are looking to include in your bankruptcy
It is good to keep some statements for accounts with debt that you are looking to include in your bankruptcy. Usually, it is not essential because most accounts will be included in your credit report and a bankruptcy may be able to use your credit report to identify all your debt, but it is always good to have a statement ready to have your attorney keep on file to make sure you have included everything.
3. Get your funds ready
Ironically, filing a bankruptcy does have a financial cost. There are a few costs you will need to pay. Most importantly, you need some funds for a bankruptcy attorney. A bankruptcy attorney can be very expensive, but if you find the right organization, it doesn’t have to be expensive and a good firm will be able to make some type of payment arrangement for you. You will need to pay a court filing fee. The most common court filing fee is the Chapter 7 fee of $335. You will need to pay for consumer credit counseling sessions. These can be as cheap as $10 per session and you can expect to pay for 2 of those.
4. Try not to make any suspicious purchases
Don’t buy a $1000 TV right before you file bankruptcy. This could be a red flag for a bankruptcy court to identify which could put a lot of scrutiny on your file. Keep spending to a minimum as would be required by your financial situation.
5. Set some time aside to research a bankruptcy lawyer and law firm
If you have take time to research restaurants before you eat there, then you certainly should take the time to research law firms. Yelp can be a great place to research a law firm. Yelp can give you very specific reviews from previous clients on all types of engagements, but make sure you are reading real reviews. There is such thing as a fake internet review. If you are reading reviews that sound like a broken record and don’t have much specifics or detail about the engagement, then there is a chance that the review you are reading could be fake. Use common sense here. If you see 100 reviews which all look fairly similar, fake reviews are likely. A real collection of reviews will mix different lengths of words, various styles of writing, and refer to a variety of topics and aspects of a business.
Bankruptcy Law Professionals has excellent Yelp reviews. We offer payment plans for our clients and free consultations. Bankruptcy Law Professionals can be contacted at 855 257-7671.