MISTAKES TO AVOID PRIOR TO FILING BANKRUPTCY

1. Running up Credit Cards: Don't use your credit cards once you have made the decision to file bankruptcy. Consumer debts incurred for luxury goods and services owed to a single creditor in excess of $500.00 within 90 days of filing are presumed to be non-dischargeable and may still have to be repaid after you have filed bankruptcy. Cash advances of more than $750.00 within 70 days of filing are presumed to be non-dischargeable and may be found to be due and owing. Don't jeopardize your "fresh start" by running up your credit cards.

2. Repaying Family Members: With regard to repaying debts, you cannot treat your family member any better than you would an ordinary creditor. In fact, a bankruptcy trustee can reclaim any amount repaid to a family member within one year of filing bankruptcy.

3. Raiding your Retirement Account: Retirement accounts are generally fully protected. You can eliminate your debt and keep whatever you have in an ERISA qualified account or Individual Retirement Account (IRA) free and clear. Many individuals drain their retirement accounts in a futile attempt to pay down credit card debt.

4. Transferring Property out of Your Name: Don't transfer property into someone else's name. A bankruptcy trustee can undo a transfer of property that previously belonged to you. This can occur if the transfer was made within two years of the filing of the bankruptcy with the intent to hinder, delay, or defraud a creditor. In some cases, the bankruptcy trustee can go back FOUR years to undo fraudulent transfers.

5. Failing to Appear in Court: If there's a collection case pending against you in state or federal court, don't assume that you can avoid the court process simply because you've decided to file bankruptcy. Until your bankruptcy petition is filed with the bankruptcy court, a collection case continues. Tell your bankruptcy lawyer if a civil summons has been issued against you in attempt to collect a debt owed, and ask your bankruptcy lawyer whether or not you need to appear at the county courthouse or respond to the complaint.

6. Failing to Be Totally Honest with Your Attorney: An attorney can only provide advice based upon information provided by the client. Failure to notify your bankruptcy attorney about ALL of your assets can lead to the loss of those assets, denial of your bankruptcy case, fines, imprisonment, or all of the above. You must also tell your bankruptcy attorney about any assets that you have sold or otherwise transferred out of your name during the past four years and honestly answer all questions the Attorney asks you.