Moving and other missteps made before filing for bankruptcy
When it comes to filing for bankruptcy, there are many dos and don’ts before filing. First of all, Bankruptcy Court requires people who file for bankruptcy to be totally honest and straightforward in everything they do. Any indiscretion can end in the dismissal of the bankruptcy settlement, putting the individual back in fair play for creditors. A person should really sit down with a bankruptcy attorney and discuss the dos and don’ts before filing for bankruptcy to make sure they fully understand what is required of them. When it comes to dealing with the government, it’s more of a situation of doing what I say and then doing what I do. Although it is important to be honest with the court, it is sometimes quite difficult to understand this requirement with all the corruption in government agencies. The federal government keeps talking about how transparent they are and at the same time all these scandals keep coming out showing the opposite.
Although the bankruptcy attorney tells his clients what to do, it seems that many of them just don’t listen and end up getting into some kind of trouble. Someone who files for bankruptcy should stop spending on their credit cards immediately after the decision to file. As a general rule of thumb, 90 days is a good amount of time, but six months is much better before filing for bankruptcy. The creditor can challenge the bankruptcy filing if they believe the debtor was loading their cards prior to filing.
One mistake many people make before filing for bankruptcy is borrowing money from their 401 (k) or retirement plan to pay off debt. Although it is noble to take some of this money to pay some bills, it is foolish to borrow money from your retirement plan that is protected by bankruptcy exemption laws. If the person does not have enough money to fully pay the debts with this type of plan, they may end up filing Chapter 7 bankruptcy after burning their retirement. They are then left bankrupt and poor with no retirement at all. Another thing also happens in this situation, the bankruptcy court considers this newly discovered money as income and taking these funds could make the person unable to qualify for Chapter 7 bankruptcy. For these people, it could be a double whammy against them. . They lost their retirement and now they don’t even qualify to file for Chapter 7 bankruptcy when they really need it. If only they had listened to their attorney and hadn’t searched their retirement account.
Another common occurrence occurs when someone files for bankruptcy due to the loss of a job. Sometimes they will look for work out of state or maybe even have to move with a remote relative due to lack of funds. When a person files for bankruptcy, they must do so in the state in which they reside. In the past, many people used to move to a state that would benefit them on filing for bankruptcy. They would check all bankruptcy exemption laws and move to the state that protects the most for their individual situation. Now, after changes to the bankruptcy code, a person must reside in the state for six months before filing for bankruptcy to use the bankruptcy exemption laws of that state. You cannot temporarily move to benefit from filing for bankruptcy.
It is best to consult a bankruptcy attorney when the going gets tough and discuss a possible move with the attorney. Sometimes your best bet may be to stay where you are until the bankruptcy filing is completed. If someone has to move for work and is in a hurry, don’t worry, you can still file for bankruptcy in the state you are moving to, you may not be able to use the bankruptcy exemptions for the state you are in. moving to. They will have to use the federal bankruptcy exemptions or the state exemptions they moved from.
In today’s economy, we see many people moving around the country in search of work. Sometimes people think the grass is greener on the other side of the fence and they think they can avoid filing for bankruptcy if they find an opportunity. They only find out that things are just as bad everywhere and that bankruptcy is still necessary. The best advice is to discuss the situation with the bankruptcy attorney before making any move.
