Filing for bankruptcy is an intimidating, scary process, and when you are anticipating doing so, it is natural to try to protect assets that are important to you and to provide for those who are closest to you. Before you do anything, it’s important to make sure that you know what you’re allowed and not allowed to do, as paying debts to friends or family members, or transferring savings or property out of your name and into a family member’s can lead to charges of fraud or preferential treatment. Your best bet is to seek advice from an experienced bankruptcy attorney before making any significant financial moves.

The first thing you need to know is that when you file for bankruptcy, you will be assigned a bankruptcy trustee who will oversee the process. That person will identify unprotected assets that can be sold and determine the value of the bankruptcy estate based on the paperwork that you provide. This “statement of financial affairs” generally lists your bank accounts and any property you own, have sold or transferred within approximately two years. This list needs to be complete and must reflect all details, including value of property and what was done with any proceeds.

If you made a decision to sell a piece of property to a family member for its fair market value, you should be safe – especially if you can show that you used the money to pay for basics like rent or food. You are also able to transfer something that would have been considered exempt. But if you transfer the property in order to try to keep it from being included as a salable asset, or process a sale that is far under fair market value either to get it out of your name or to satisfy a debt to somebody close to you, it can be considered fraudulent, and the sale can end up being voided by the trustee.

Selling property but retaining control over it is another questionable transaction that – at best – will require explanation. The most important thing to remember in approaching a bankruptcy is that you must be honest about everything that you do. If you try to conceal an activity or an asset it will be sure to come back to you and work against you.

For more information about what financial actions you should and should not pursue in a run-up to filing for bankruptcy, contact our experienced attorneys today to set up a time to meet.

When past-due bills and calls from debt collectors have you dreading the mailbox and the phone, bankruptcy may feel like your only way out. While filing for Chapter 7 or Chapter 13 provides one answer, that doesn’t mean that it’s the only one – or even the best one for you. Before moving forward with a decision that would impact you for years, take the time to explore your particular situation and what other options might make more sense.

While filing for bankruptcy has the benefit of immediately halting credit collection actions, it does not necessarily eliminate all of your debts. Specifically, if student loans, alimony, child support or property liens represent large portions of your outgoing funds, filing for bankruptcy will not help you at all. While credit card debt, medical bills, business debts and personal loans can be discharged, these other obligations will survive a bankruptcy filing. If this describes you, then investigating alternatives makes even more sense. So what are those other options?

• If you have credit card debt, home mortgage debt, or car loan debt, you may find your lenders are open to working out a new payment plan. Though this possibility may seem remote, consider the alternative that your lenders face if you file for bankruptcy. They would have to forgive your debts entirely, leaving them with nothing to satisfy your debt rather than being paid off over a longer period of time, or at lower interest rates.
• Take a good look around and determine what you can sell. As hard as it may be to give up assets, remember that filing for bankruptcy will leave you with little choice about what gets sold, while taking matters into your own hands may find you able to satisfy some of your debts and avoid the bankruptcy process entirely.
• Examine your spending habits to see what you can eliminate. Dining out or having food delivered, paying for multiple cable stations or subscriptions, and constantly buying clothes and shoes are examples of lifestyle choices that may be costing you more than you realize. When faced with the choice between eliminating luxuries and affecting your credit rating for years, those conveniences may become a lot less necessary to you, and what you are spending on them can easily be used to pay off your debts.

Examining your debt dispassionately can be a real challenge. For assistance, contact our bankruptcy attorneys to discuss your options.

Many people dream of becoming entrepreneurs, and not all of those who take the leap will be successful. When a self-employed person finds themselves facing insurmountable debt – whether as a result of business failure or for an entirely unrelated reason – they frequently believe that filing for bankruptcy will be harder without paycheck stubs or other income documentation. Though earnings history is an important part of the information required when filing for Chapter 7 or Chapter 13, bankruptcy courts have recognized that self-employed business owners and independent contractors will need to provide different types of information.

If you are self-employed and you need to file for bankruptcy, you will rely on your previous years’ tax returns, your bank statements, and the types of documents you have used to seek credit in the past. You will also need both monthly and annual profit and loss statements and receipts from any expenses you’ve incurred for the last several years. That means that one of the first things that you need to do is to get those documents together … and if you haven’t generated P&L statements, it’s time to put them together.

An experienced bankruptcy attorney will be able to answer your questions and calm your concerns about the special approach that the self-employed will need to adopt during a bankruptcy proceeding, but you can anticipate needing the following:

• Your account statements for both your business and your personal accounts dating back three years
• All contracts, documentation of cash payments, invoices and receipts, and check stubs from the previous three years
• Federal and tax returns from the previous two years for those filing for Chapter 7 bankruptcy and for four years for those filing for Chapter 13 bankruptcy (the extra years of documentation is necessary to address and confirm the amount of back taxes owed)

Those same documents should be used to put together profit and loss statements if your business hasn’t already had them prepared by an accountant. These statements will prove helpful at the creditors meeting that is required as part of the bankruptcy process. You should anticipate needing two years’ worth of these statements reflecting monthly and annual financial activity.

Though self-employed individuals pursuing bankruptcy may have to work a bit harder to document their financial situation, the extra steps required should not prove a significant hardship if you have help from an experienced bankruptcy attorney. Contact us today to set up a time for a consultation.

Insurmountable debt leads people to stress and frustration. Bankruptcy is an option that can help, but it is a process that few people fully understand, and most people view as a type of surrender. In trying to find the best solution to alleviate the situation, many people contemplate selling their home, especially if they have a significant amount of equity in it: After all, they assume that they are going to have to give it up anyway, and if that is the case then they think they will probably get a better price if they sell it themselves, and then be able to use the money or find a way to shelter it.

The truth is that if you are even contemplating a bankruptcy filing you should not make any major financial moves until you’ve spoken with an experienced bankruptcy attorney. Not only is there a very good chance that your home is one thing you will be able to keep, but there is also a chance that if you sell your home and go about it the wrong way you will end up losing any profit you realize and might even be in jeopardy of being accused of fraud.

The first and most pertinent and important question you need to ask yourself is whether you want to move out of your home or not. If you would prefer to stay but feel like your financial situation is preventing you from doing so, bankruptcy might help. By eliminating your other debts via bankruptcy, you may find yourself able to afford the costs of your home. If, on the other hand, you were planning on moving anyway, then it is important that you know how to time the sale and what to do with the proceeds. If you use the money to pay for things that are necessary for your health and welfare then you will likely be fine, but you will need to keep all records in order to prove that is what you did rather than trying to shelter the money from your creditors.

It is vitally important that you keep a paper trail of any financial transaction that you pursue within six months of filing for bankruptcy. That includes depositing money into the bank upon receipt and keeping records of all purchases that you make. Failure to do so can result in your bankruptcy filing being denied or your being accused of trying to hide money. For help navigating the complicated rules surrounding bankruptcy, contact our experienced, compassionate attorneys today to set up a time for a consultation

Bankruptcy is a legal proceeding that most people have heard of, but until you’ve actually gone through it you don’t know what to expect or how to prepare. Like anything unfamiliar, filing for bankruptcy can be intimidating to anticipate, but if you take the following steps one at a time, you can feel confident as you move forward.

1. Complete credit counseling – These courses are required prior to filing for bankruptcy. They only take about an hour and can be taken online or over the phone. The cost of this class is generally about $25.
2. Pull together all of your financial papers in preparation for meeting with an attorney. You’ll need your bank statements, your taxes for the past two years, proof of your income, a credit report, and all correspondence regarding any legal claims or collection letters against you. If you have a mortgage or car loan, be sure to include those statements.
3. If your bank is also one of your creditors, it would be a good idea to open a new bank account. That is because once you file for bankruptcy, your creditor/bank might close your account.
4. Once you’ve selected an attorney, start referring all collection calls to them. You will be amazed at how quickly these annoying and threatening calls and letters stop.
5. Make a list of questions you can ask your attorney, making sure you let them know if any of the information on the paperwork that you’ve assembled has changed.

In addition to following these steps, there are a few things that you should avoid doing for fear of making your situation worse or ruining your chance at being approved for bankruptcy. These include:

1. Even if you owe your family members or friends money, now is not the time to pay them back, and do not transfer any assets to any of them in order to try to protect them. In fact, if you’ve repaid loans to any close associates in the last year, make sure that information is included in your documentation.
2. Leave your retirement accounts untouched. Their holdings will be safe from liquidation.
3. Don’t charge things on your credit cards or take on any new debt on things like financing a car. The only exception to this rule is unplanned medical debt.

For more information on the bankruptcy process, contact our experienced, helpful bankruptcy attorneys today to set up a time for a consultation.

If you’re getting ready to file for bankruptcy, you may be wondering what will happen to your various bank accounts, and particularly any savings or retirement funds that you may have. While most people know that it is a very bad idea to run up additional debt immediately before filing for bankruptcy, there is less known as to what you will be able to keep.

Putting money in savings may seem like a good idea at first, as once you’ve filed for bankruptcy it will generally preclude your creditors from bothering you. But that doesn’t mean that what is in your bank accounts is exempt from being used to satisfy your debts. Each state has its own exemptions, and the trustee that is assigned to your case will be responsible for distributing any funds that exceed whatever exemption amount applies. You also face the additional possibility that your bank will freeze your funds, making it impossible for you to pay more bills as they come in. Though your bankruptcy trustee will be able to address this, if your balance is kept low then you don’t have to worry about the exemptions and will be able to keep paying your bills and accessing some cash.

Another consideration is whether the bank where you have a savings account is one of your creditors. If you have taken out a loan then you probably agreed to what is known as a “set off” that allows them to take funds out of your other accounts in order to satisfy your debts, even if as a creditor they have been told that they can’t pursue collections because of your bankruptcy status. Adding to savings would likely see those funds applied to your balance as soon as the bank is notified of your filing. The same may be true of utility companies and of automatic payments that you have previously authorized.

Some of your savings accounts will be safe from your creditors. This is particularly true of your retirement savings and pension accounts, but you should be cautious about moving money around in a way that could appear to be fraudulent or deceptive in the eyes of the bankruptcy court. For assistance in navigating your debt and pursuing bankruptcy in the way most beneficial to you, contact our experienced attorneys today to discuss your situation.