Five Things to Avoid Before Filing Bankruptcy in Miami Lakes
If you owe debts that you cannot afford to pay, filing a Chapter 7 or Chapter 13 bankruptcy case might be the best way to get rid of debt while protecting your property and income. However, there are several things that you should avoid doing before filing a bankruptcy petition. Our Miami Lakes bankruptcy attorneys offer free bankruptcy consultations. We urge you to read through the five items below and then take advantage of the free consultation to learn more about how filing bankruptcy can help you get out of debt.
Are You Considering a Chapter 7 or Chapter 13 Bankruptcy Filing? Avoid These Financial Mistakes Before Bankruptcy
- Transferring Money Out of Retirement Accounts
Funds in retirement accounts are typically protected by bankruptcy exemptions. In other words, you can file for bankruptcy relief and keep your retirement funds. However, if you remove funds from retirement accounts before filing bankruptcy, these funds might not be protected by bankruptcy exemptions. It is best to avoid withdrawing any funds from retirement accounts until you consult with a bankruptcy lawyer.
- Borrow Money Against Your Home
In many cases, a debtor’s equity in his or her home is also protected by bankruptcy exemptions. However, once you remove that equity by taking out a mortgage or equity line, you lose that protection. Furthermore, if you cannot afford to pay your debts, consolidating debts into one payment by taking out a loan will not solve the problem. A better option for you might be filing bankruptcy to eliminate the debt while protecting the equity in your home.
- Transfer or Give Away Property
Bankruptcy law allows the bankruptcy trustee in a Chapter 7 case to reverse transfers of property without a certain period before filing bankruptcy. Therefore, if you transfer title to your vehicle to your sister, the trustee might be able to take the vehicle, even if your sister paid money for the vehicle. The trustee analyzes the transfer to determine if it violates bankruptcy law. Not all transfers or gifts violate the law; however, it is best to consult an experienced Miami Lakes bankruptcy attorney BEFORE you transfer any property if you are experiencing financial problems.
- Paying Off Co-Signed Debts
You might be worried that your bankruptcy filing will negatively impact someone who is jointly liable with you for a co-signed debt. Therefore, your first thought is to pay the debt in full before filing bankruptcy to prevent the co-signer from being sued for the unpaid debt or being responsible for the payments. However, this choice might make the matter worse. In a bankruptcy case, the bankruptcy trustee could recover lump sum payments or large payments to creditors if those payments are made within a certain period before filing a bankruptcy petition.
If this happens, you have lost the money, and your co-signer still owes the debt. Before paying large sums to any creditor, take advantage of the free consultation with our bankruptcy attorney to discuss ways to handle co-signed debt that might protect you and the co-signer.
- Deposit Money in Bank Accounts Where You Owe Money
In some cases, your bank might be able to freeze your account and seize funds in an account to pay toward or satisfy a debt you owe to the bank. Even if you are successful in reversing the action taken by the bank, your money could be tied up for weeks or months while we pursue legal action through the bankruptcy court. Instead, open a bank account at a bank that you do not owe money and begin using this account before filing a Chapter 13 or Chapter 7 bankruptcy case.
Are You Ready to Get Out of Debt?
Adams Law, P.A. can help you take steps to eliminate debt that you cannot afford to pay. Our South Florida bankruptcy attorneys provide the support, guidance, and legal counsel you need throughout the entire bankruptcy process. Call (305) 615-2905 or use the contact form on our website to schedule your free consultation today.
