{"id":365,"date":"2011-11-10T19:35:50","date_gmt":"2011-11-10T19:35:50","guid":{"rendered":"http:\/\/www.westcoastbk.com\/blog\/?p=365"},"modified":"2012-09-12T06:39:07","modified_gmt":"2012-09-12T06:39:07","slug":"the-top-10-things-to-do-before-filing-bankruptcy","status":"publish","type":"post","link":"https:\/\/www.westcoastbk.com\/blog\/2011\/11\/the-top-10-things-to-do-before-filing-bankruptcy\/","title":{"rendered":"The Top 10 Things To Do Before Filing Bankruptcy"},"content":{"rendered":"

By Ryan C. Wood<\/a><\/p>\n

After meeting with hundreds and hundreds of potential clients during our free consultations the same issues arise over and over again.\u00a0 The following are the top ten most common issues that should be addressed or followed prior to filing either a chapter 7 bankruptcy or chapter 13 bankruptcy case.<\/p>\n

10.\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Do Not Wait To Speak To An Experienced Bankruptcy Attorney<\/p>\n

Even if you are not ready to file bankruptcy speaking with an experienced bankruptcy attorney will give you the information you need to make educated decisions.\u00a0 To determine if you are speaking with an experienced bankruptcy attorney, ask the attorney how many other areas of law they practice, how long they have practiced bankruptcy law, how many bankruptcy cases have they filed and to name the trustees in the jurisdiction and what document requirements each trustee requires.\u00a0 If the attorney does not know who the trustees are and what each of them requires they do not regularly file bankruptcy cases.\u00a0 One the most common problems we face is meeting with potential clients when it is already too late.\u00a0 If you have been served with a summons and complaint you need to speak with an bankruptcy attorney.\u00a0 If you owe taxes and the IRS or FTB has indicated they are going to garnish your wages you need to speak with a bankruptcy lawyer.<\/p>\n

9.\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Review Your Monthly Expenses<\/p>\n

All consumer bankruptcy petitions include Schedule J.\u00a0 Schedule J is the estimate of the average or projected monthly expenses for your household at the time the bankruptcy case is filed.\u00a0 Prior to scheduling a free consultation with an experienced bankruptcy attorney take a few minutes and review your bank account statements and get a better idea of where your money is going each month.\u00a0 This will help to determine if you have any disposable income available to creditors.<\/p>\n

8.\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Make Sure All of Your Tax Returns Are Filed<\/p>\n

In 2005 the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) provided new guidelines for the filing of tax returns and bankruptcy.\u00a0 If you file for bankruptcy you will need to provide your tax return for the previous year, or the current year if requested.\u00a0 If you fail to file your return that becomes due after you file for bankruptcy the IRS can request dismissal of your bankruptcy case.\u00a0 Section 1308 of the Bankruptcy Code requires filers of chapter 13 bankruptcy cases to have filed all of their tax returns for the previous four years before the filing of the bankruptcy petition.\u00a0 This is one of the standard questions asked by the standing chapter 13 trustee at the meeting of the creditors.<\/p>\n

7.\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Review and Document Self-Employment or 1099 Income<\/p>\n

If you are self-employed or receive 1099 income it is essential that you know what your income is and what your expenses are for each of the six-months prior to filing for bankruptcy.\u00a0 Just like in Number 6 below, the Means Test uses a six-month average of your income to determine if you have disposable income available to creditors each month.\u00a0 Determining what your take home pay is when self-employed or receiving 1099 income is always more time consuming, but absolutely necessary prior to filing bankruptcy.<\/p>\n

6.\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Save Your Pay Stub or Proof of Income Each Month<\/p>\n

In 2005 Congress passed the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) changing the bankruptcy code and creating what is commonly called the Means Test.\u00a0 The Means Test is based upon local and national standards for expenses.\u00a0 The Means Test also uses the six-month average of your gross income extrapolated to a twelve months.\u00a0 You will need all six months of your pay statements or other proof of income.<\/p>\n

5.\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Do Not Take a Cash Advance on a Credit Card<\/p>\n

Taking a cash advance close in time to filing bankruptcy can be a huge problem.\u00a0 This can be a problem for the same reasons detailed in Number 4 listed below.\u00a0 It really depends upon the circumstances, but if you take a $5,000 cash advance on a credit card three weeks before filing bankruptcy you will probably hear from the credit card company when you file bankruptcy.\u00a0 An adversary alleging fraud could be the likely result.<\/p>\n

4.\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Do Not Continue to Use Your Credit Cards<\/p>\n

One of the most common complications in a consumer bankruptcy is the use of credit close in time to filing for bankruptcy.\u00a0 The problem is the recent use of credit is circumstantial evidence that the user never had the intent to pay the debt back.\u00a0 If you are unable to pay your bills as they come due how can you incur more debt?\u00a0 If you are not making payments to your creditors do not continue to use your credit cards.\u00a0 If you are having trouble paying your credit cards and are missing payments regularly you need to stop incurring more debt.<\/p>\n

3.\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Do Not Transfer Money or Assets to Friends or Family Members<\/p>\n

The simple transfer of a car to a friend or family member before filing bankruptcy to reduce your assets is not allowed.\u00a0 It must be disclosed and will only complicate your bankruptcy case.\u00a0 When filing bankruptcy the sole goal is to successfully discharge all of your eligible debts.\u00a0 Transferring assets in an attempt to hide assets will only complicate your bankruptcy case and possibly have your right to a discharge take away.<\/p>\n

2.\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Do Not Borrow Funds or Take an Early Withdrawal From an Individual Retirement Account or 401(k) Plan<\/p>\n

Bankruptcy provides exemptions to protect assets such as retirement funds.\u00a0 We meet with client after client that has unfortunately borrowed or withdrawn from their retirement accounts all of their retirement money trying to pay off debts or stay afloat.\u00a0 You must weigh all the positives and negative before choosing to withdraw or borrow against your retirement accounts.\u00a0 Bankruptcy provides exemptions that can protect for the average person all of their retirement funds.\u00a0 You can file bankruptcy and still keep your retirement.<\/p>\n

And The Most Important:<\/p>\n

1.\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Disclose All of Your Income, Expenses and Assets<\/p>\n

Anyone that files for bankruptcy protection must disclose all income, expenses and assets in their petition.\u00a0 The backbone of bankruptcy is the automatic stay, but the body is treating creditors according to the type of debt owed and the priority of payment of debts required under the bankruptcy code.\u00a0 Without full disclosure treating all parties fairly cannot take place.\u00a0 It is not the bankruptcy court\u2019s duty or the duty of the trustee assigned to your case to find assets.\u00a0 It is the bankruptcy filer\u2019s duty to be open and honest about their income, expenses and assets in exchange for the discharge of their debts.\u00a0 If you have not fully disclosed everything you may not only lose your right to a discharge of your debts, but criminal charges could be filed and fines imposed.<\/p>\n

For more information about filing bankruptcy or the steps necessary to file a successful bankruptcy you may contact us at San Francisco bankruptcy<\/a> or our Redwood City bankruptcy lawyers<\/a> toll free at 1-877-963-9543.<\/p>\n","protected":false},"excerpt":{"rendered":"

After meeting with hundreds and hundreds of potential clients during our free consultations the same issues arise over and over again. The following are the top ten most common issues that should be addressed or followed prior to filing either a chapter 7 bankruptcy or chapter 13 bankruptcy case.<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[31],"tags":[],"_links":{"self":[{"href":"https:\/\/www.westcoastbk.com\/blog\/wp-json\/wp\/v2\/posts\/365"}],"collection":[{"href":"https:\/\/www.westcoastbk.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.westcoastbk.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.westcoastbk.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.westcoastbk.com\/blog\/wp-json\/wp\/v2\/comments?post=365"}],"version-history":[{"count":4,"href":"https:\/\/www.westcoastbk.com\/blog\/wp-json\/wp\/v2\/posts\/365\/revisions"}],"predecessor-version":[{"id":719,"href":"https:\/\/www.westcoastbk.com\/blog\/wp-json\/wp\/v2\/posts\/365\/revisions\/719"}],"wp:attachment":[{"href":"https:\/\/www.westcoastbk.com\/blog\/wp-json\/wp\/v2\/media?parent=365"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.westcoastbk.com\/blog\/wp-json\/wp\/v2\/categories?post=365"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.westcoastbk.com\/blog\/wp-json\/wp\/v2\/tags?post=365"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}