If you are considering filing bankruptcy, there are a few transactions you should avoid so you do not have any complications with receiving your discharge.
Credit cards and cash advances:
You should stop using credit cards if you know you are not going to pay them off. When you decide to file for bankruptcy, do not continue to use credit cards and do not take any cash advances. For example, if you decide that you are going to file for bankruptcy and within 90 days before filing you use your credit cards and take cash advances, those credit card companies could claim that you used the cards with fraudulent intent. They would argue that at the time you used the credit cards or took the cash advances you were never planning on paying them off, and therefore, you had fraudulent intent. When you decide to file for bankruptcy, stop using your cards and do not take any cash advances.
New loans prior to filing for bankruptcy:
If you apply for a loan just prior to filing for bankruptcy you may have to keep the loan. For example, if you receive a loan for a car within 90 days of filing bankruptcy you will most likely have to keep paying the loan. So if you know you’re going to file for bankruptcy, do not take on a loan unless you want to keep that loan.
Do not transfer any real property or personal property into another person’s name. When you file for bankruptcy you must list all your personal property and real property. If there is equity in the property the Trustee will want to take the property. Therefore, many people wrongly believe that if they transfer the title to someone else they do not need to list the property. But that is not the case. You will have to list all transfers of property, in some cases you will have to list property transferred 2 years prior to filing, and other cases 10 years prior to filing for bankruptcy. For example, I have had many clients tell me that they own a car that is paid off and titled in their name but they consider the car to be their child’s car. When filing for bankruptcy, it doesn’t matter who drives the car, it only matters whose name is on the title. In that situation, the car would have to be listed in the bankruptcy because the title is in the parent’s name. Even if the parent transferred the title into the child’s name, that transfer would have to be listed in the bankruptcy.
Not disclosing real property and personal property:
As I explained above, when you file for bankruptcy you will have to list all your property, both real and personal. Do not hide property. You must disclose everything.