Filing Chapter 7 bankruptcy is brand new territory for most people. There is a lot to take into consideration, not the least of which are the things you should not do.
It’s important that you know and understand what is advisable for you to do – and especially what isn’t – so you can sidestep getting yourself into a sticky, unnecessary predicament. “Suspicious or frivolous spending” will only come back to haunt you. This is definitely not the time for either one.
Play it safe, sensible and smart. Be extra-cautious. Don’t try to outwit the court or a trustee. Know the rules and limits that now apply to your spending and take them seriously. Abide by them and you will have an excellent chance of getting through the bankruptcy process with as few snags as possible.
This is not the time to make good on money you owe people
If you were hard up for money and you borrowed some from your relatives or pals, don’t pay them back now. You may be striving to do the right thing by them and resolve your indebtedness, but if what you pay back exceeds a particular amount, the trustee may have to reclaim it.
Forget the spending spree
You might be dreaming of spending to the hilt, thinking that your debt will be eliminated by the bankruptcy filing and you will be absolved from paying up. Don’t do it. The court will not look kindly upon any lavish, unneeded expenditures less than three months following or prior to filing for bankruptcy. Spend frugally and confine yourself to the purchases you really need.
Pass up the urge to transfer property
This could reflect badly on you. It may be entirely innocent, but it could be interpreted as a move to conceal some of your assets, which can constitute fraud.
Have reliable guidance
Bankruptcy proceedings can be tangled and bewildering. Rather than try to navigate the situation on your own, have a professional clearly explain what you must do, and as well as refrain from doing. You want the process to go smoothly and have an outcome that helps you regain financial stability.