Like most, you probably breathed a sigh of relief once you finally settled on bankruptcy as the best option for addressing your debt. You can expect to continue feeling better about your circumstances but don’t drop your guard too low.
The bankruptcy court will be looking closely at your current activities and those leading up to your filing. Make certain you do nothing to hurt your Chapter 7 or 13 bankruptcy.
1. Don’t transfer or give away property
It might seem harmless to protect your grandfather’s collection of rare coins by giving it to a relative, but the bankruptcy court won’t see it that way. Instead, it may view your action as an attempt at bankruptcy fraud, which could lead to the dismissal of your case.
A better option is to learn what forms of personal property are exempt from bankruptcy under New Jersey law.
2. Don’t take on more debt
Since you’re filing for bankruptcy anyway, what’s the harm in maxing out your credit cards to improve your immediate circumstances? Again, the court will have a different take on these actions and could determine you are committing fraud.
Now is not the time to spend even more money. It is usually best to stop all unnecessary spending to show the court you are committed to financial recovery.
3. Don’t pay some but ignore others
Perhaps you believe you should pay off what you can before you file for bankruptcy. Although this may seem wise, it could cause problems with your filing if you pay only some creditors. Under bankruptcy law, the same-class creditors connected to your case must receive equal treatment.
The more you know about bankruptcy, especially from a legal perspective, the better your chances of resolving your debt smoothly.