Many times when people face the proposition of bankruptcy in Atlanta, it is due to unforeseen or unavoidable life circumstances that put them in a financial bind. In an attempt to avoid filing bankruptcy, well-meaning people often take steps and make decisions that will hurt them more than help their financial situation. Here are commonly made mistakes prior to filing bankruptcy you should avoid.
- Transferring Assets
Sometimes people believe that transferring assets out of their name before filing a bankruptcy petition will let them hide assets from creditors. This is not the case, however – asset transfers within a certain period of time must be disclosed. Private trustees can also determine if an invalid transfer may occur before a filing and liquidate the asset instead to distribute to creditors.
This mistake is commonly made because petitioners fail to realize some assets they try to squire away fall under bankruptcy law exemptions – a benefit they lose if they transfer assets before filing.
- Repaying Family Loans
If family or friends have loaned a debtor money to get through tough times and they feel they should repay those loans before filing bankruptcy – wait to repay them after the discharge of bankruptcy. A private trustee can potentially try to recapture the repayments a debtor has paid back before the filing took place.
- Large Purchases or Cash Advances on a Credit Card
Credit card companies are given protections by the Federal Bankruptcy Code for any purchases, cash advances, or balance transfers a bankruptcy petitioner makes within 60 days of filing their case
- Paying Credit Card Debts Through Investment/Retirement Loans or Distributions
Collection agencies and credit card companies often pressure people to take a loan or distribution from a retirement account to pay their outstanding debts – this is not advisable. Laws on the book protect retirement accounts in almost every case from being seized by credits. These assets are exempt, so by taking a loan from a retirement account to satisfy debts you are losing assets you would most likely be able to keep.
- Postponing Bankruptcy Filing Until Judgments are Entered
If someone has filed a complaint or lawsuit over an outstanding debt against you, do not wait until judgment is entered to file bankruptcy. Any judgment will be recorded against all your property as a lien, and bankruptcy proceedings are not a guarantee the lien can be removed and may also create extra expenses and work.
Get Help with Your Georgia Bankruptcy
If you are going to file bankruptcy in Atlanta, it is helpful to know the consequences of actions you may think are a good idea but may actually harm your case. To get answers, contact to the experienced Georgia bankruptcy attorneys at The Ballard Law Group. We are here to help you navigate bankruptcy in as advantageously as possible and obtain the best result possible. We offer a free bankruptcy consultation to evaluate your situation and help you both understand how bankruptcy rules may impact you and how to use them to your advantage. Contact us today by calling 404-220-9906, booking an appointment online on our contact page, or chatting with one of our available representatives.