There are several behaviors you should not engage in if you are in the midst of, or are imminently planning to file for a bankruptcy discharge. For example, in the 90 days prior to the date that your bankruptcy petition is filed, you should avoid paying back any personal monies that have been loaned to you.
To do so will cause those payments to be scrutinized by your bankruptcy trustee, and likely s/he will dub them "preference payments
,' which means you favored paying back some
of your creditors over others. That is considered foul play in bankruptcy court, and any money that you paid back in the 90 days preceding your filing can be recovered so that it can be split evenly between everyone you owe money to.
You also should not go crazy using your credit cards with the thought that "the debt will be erased anyway, so why not?" This kind of action is called bankruptcy fraud
and when it is discovered, your case will be dismissed without discharge of your debts.
Also, when possible, try to avoid getting married
in the weeks and months leading up to your bankruptcy filing date. Plan your wedding around your bankruptcy discharge, especially
if your future husband or wife makes a decent wage. To marry him or her before filing for bankruptcy means the court will then consider your joint income when deciding whether or not you can pay back your debts.
Probably the most important thing to avoid when getting ready to file for bankruptcy is lying to your bankruptcy lawyer
. For that matter, if the case is underway, don't lie to the trustee either. Making false claims regarding a bankruptcy filing will immediately result
in your case being dropped, and may mean that you can never again file bankruptcy on the debts that you currently hold.
An interesting question that has been raised recently is whether or not a potential bankruptcy debtor can (or should
) still take a vacation in the 90 days before filing, and/or during the actual case timeline. While it may seem that the easy answer here is "Don't do it
;" it's actually ok as long as you can easily prove that you already paid for the vacation, and at the time of payment, you had no financial difficulties.
A pre-paid vacation is often non-refundable, and is usually booked far in advance, which for many people means that it was paid for when their financial outlook was much brighter. Anyone's money situation can change on a dime! Previously, you may have been current on your bills, regularly slipping some money into savings, and you were still able to purchase a luxury vacation. With the quick snap of two fingers, you have now found yourself in a much different set of circumstances.
You can take a vacation that was pre-paid (as long as it was NOT paid for in the 90 days preceding your case filing and you can assuredly prove that your finances were stable when you paid for it). Take the trip, but don't use your credit card
to pay for a bunch of extras while you're there, because those expenses will definitely
be called into question during your bankruptcy court case
Image credit: Hakan Dahlstrom