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Things to Avoid Doing Before Filing for Bankruptcy in Alabama

If you’re thinking about moving money into another person’s bank account or settling debt with one creditor over the other prior to filing for bankruptcy, you might want to hold off. There are certain things that should and shouldn’t be done before filing for bankruptcy and in this article, we’re going to outline a few you’ll want to avoid as you prepare for the bankruptcy process.

 

  1. Transfer money from your bank account into a close friend or relative’s account.

If you’ve read up on filing for bankruptcy, then you probably learned that only some of your assets are exempt from liquidation, depending on the type of bankruptcy you file for. For instance, if you were to file for a Chapter 7 bankruptcy, which typically provides debtors with a “fresh start,” you’ll only be able to maintain possession over a certain amount of cash.

For example, if the bankruptcy court were to only allow you to keep $5,000 in cash, the remaining amount you have on hand could potentially go toward repaying your creditors. While it might seem beneficial for you to move money around so that you are able to keep it, it won’t be a good look when you file for bankruptcy. It also wouldn’t be a good idea to spend the money you have on costly items that you intend on later returning.

The trustee who is assigned to your case will comb through all your financials and see that you’ve attempted to “hide” money by transferring it to someone else. This could result in you being denied your request for bankruptcy

 

  1. Pay to have your debt consolidated.

If most or all your debt is dischargeable, it might not be wise to spend money on debt consolidation services just before filing for bankruptcy. If you were to file for Chapter 7 bankruptcy, your debt, whether it is consolidated or not, could be wiped away and the money you spent to consolidate it may go down the drain.

If you want to consolidate your debt just before filing for bankruptcy, speak with a Pell City, AL bankruptcy lawyer first as they can advise you as to what you should do.

There are two very important things you are going to want to refrain from doing just before filing for bankruptcy—hide and spend money. Hiding money and other assets could land you in hot water while spending money carelessly could result in you being left with less than you would have had after the filing is complete.

If you have questions about the bankruptcy process or want to find out if you qualify for bankruptcy, contact Hill, Gossett, Kemp & Hufford, P.C. to discuss this with an experienced Pell City, AL bankruptcy attorney.

 

Disclaimer: No representation is made that quality of legal services provided is greater than the quality of legal services provided by other attorneys.

 

Hill, Gossett, Kemp & Hufford, P.C. can be reached at:

 

Moody Office

2603 Moody Parkway, Suite 200

Moody, Alabama 35004

Phone: (205) 640-2000

Website: www.hwhlawgroup.com

 

Leeds Office

7900 Parkway Drive

Leeds, AL 35094

Phone: (205) 699-5500

 

Springville Office

6441 U.S. Highway 11

Springville, Alabama 35146

Phone: (205) 467-2225

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