We see a lot of Minnesotans who are suffering from overwhelming debt. When they initially speak to us they always want to know, are there things I should not do before filing Chapter 7 Bankruptcy? The answer is yes! Two things come to mind right off the bat. Sometimes, it is not that these things will prevent you from filing Chapter 7 Bankruptcy, but they will definitely complicate your bankruptcy needlessly.
First, do not transfer any of your assets for less than fair market value. Do not deposit your paychecks into someone else’s checking or savings accounts. Do not transfer the title to your car into your boyfriend’s name for nothing. If you do these things, the Bankruptcy Code considers them fraudulent transfers and a bankruptcy trustee can sometimes undo these transactions and recoup the money or value of the assets for the benefit of all your creditors.
Second, do NOT pay any family, friends, or business partners money within one year prior to filing your bankruptcy for money that you owe them. The Bankruptcy Code considers these payments to be “preferences” and the Chapter 7 trustee is allowed to try and avoid these preferences and recoup the money for the benefit of all your creditors. Do you think mom and dad are going to find it funny that they have to pay a trustee 5k for money that you repaid them 11 months ago? I guarantee you they will not.
While these are not the only things you should not do before you file bankruptcy, they are among the top things not to do before you file Chapter 7 Bankruptcy in Minnesota.
When the time is right, or when you are ready, reach out to Minnesota’s NICEST bankruptcy law firm at www.kainscott.com. You will be so happy you did!