If you are considering whether or not you want to file for a Chapter 7 bankruptcy, then it is vital that you know about the many things you should not do prior to filing. Just as there are many actions that you should take before deciding to file your case, there are also many things you should not do to protect yourself during the bankruptcy process, such as each of the following:
Don't Avoid Filing Your State and Federal Income Tax Returns
The bankruptcy court will require you to submit your state and federal income tax returns for the past couple of years when you file your case. If you have not filed your taxes, then you must do so before you can file for Chapter 7 bankruptcy protection.
Don't Fraudulently Incur Any New Debt
If you know that you are going to file for Chapter 7 bankruptcy in the next year, then you should avoid running up any extra debt. For example, if you open a new charge account and purchase a new laptop in the months before you file for protection from the courts, then this will be seen as a fraudulent transaction.
Don't Sell or Give Away Items that have Value
It is very important that you do not give away or sell any of your valuable personal items before you file for Chapter 7 bankruptcy. While you may be tempted to sell some valuables to pay back some of your debt, you should avoid doing this. Once you have filed your Chapter 7 case, then the trustee will work with you if you need to liquidate any assets. Liquidating assets to pay back personal loans to family and friends is especially frowned upon because the bankruptcy process is designed to treat these debts just the same as your other debts.
Don't Forget to Inform Your Creditors of Your Bankruptcy Case Filing
Finally, don't forget to inform your creditors that you have filed your bankruptcy case. If you fail to notify people who have obtained a judgment against you, then they could move forward with garnishing your wages or taking the money from your bank accounts illegally. Since bankruptcy is simply a financial transaction, you should not be embarrassed to notify your creditors about your legal case. In fact, your creditors need to know this information and will be happy that you were honest and shared it with them.
To learn more, talk to a bankruptcy lawyer from a firm like Dunnigan & Messier P.C.