When filing for bankruptcy, many people make mistakes. They can cause serious financial harm, so learn what to watch out for before you file for bankruptcy. Here is what not to do when you are filing for bankruptcy in Ohio:
1. Never Transfer Property Out of Your Name
People will often transfer property out of their name before filing out a bankruptcy form because they believe if they do not own the property, the trustee cannot take it away. This is not true and can make the situation worse for you.
The trustee legally can sue you when you do this, and then they can take the property and sell it anyway. This is usually the case for any property transferred four years before filing for bankruptcy. Even if you transfer to a relative or close friend, the trustee will be allowed to sue you, so it’s better to not take this risk.
2. Never Repay a Relative
From the law’s point of view, your relatives likely have no legal rights when it comes to your money. You cannot treat them differently from creditors as they are considered to be part of the same class.
For instance, what might happen if you were to receive your tax refund before filing and give it to one of your close relatives to repay a debt? The trustee will be able to sue your relative to get the money you repaid them, and they will then disperse it to other creditors. Therefore, never repay debts to family or friends before you file for bankruptcy.
3. Never Incur Debt or Add Charges You Cannot Pay
When you have officially filed for bankruptcy, it is illegal to add to your debt that you have no intention of repaying. It is considered a crime and can get you into serious trouble.
Be sure not to use your credit cards at this point and do not add to your other debts – you might lose your right to cancel the debt while in bankruptcy. Plus, you might find yourself gaining more serious legal charges.
4. Never Take Money from Your Retirement Account
Retirement accounts are unique in that they can never be taken away from you, even when you are going through bankruptcy. You can cancel your debt without having to empty your retirement account, so do your best to not drain its funds. If you did, you would not have that money for when you are ready to retire.
The only exception to this rule would be in the case of an emergency, which you should discuss with your accountant, so you understand the ramifications and see if there are other options available to you.
5. Never Borrow More to Pay the Debt
When filing for bankruptcy in Ohio, never borrow from a line of credit through your home or take out another mortgage. You will be putting your home at risk if you incur more mortgage debts. If you feel that this is your only option at this point, be sure to consult with your attorney before you take action.
6. Don’t Let Creditors Get Judgments Against You
If you have a collection case against you, do not believe you can skip out on the court process after filing bankruptcy. Until the bankruptcy case is completed, the collections case can continue.
7. Never Lie or Hide the Truth from Your Attorney
Remember, your attorney is there to represent you. They can only give you advice based on the information that you give them. When you lie or hide the truth from them about your assets or situation, you might get fined, lose the bankruptcy case, or even face imprisonment. Your attorney is someone you can trust!
Contact Moseman Law Office Today
Attorney Heather Moseman is a bankruptcy attorney in Northeast Ohio who can help with your bankruptcy needs. There is no reason for you to learn how to file on your own or deal with the stress of going to court alone. Attorney Moseman will stand in your corner as your representative to help you through this time. Contact us today!
