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Bankruptcy: What Not to Do Before Filing

Law Office of Scott N. Tisevich Sept. 2, 2022

Bankruptcy Law Books on Shelf for Legal ReferenceThe state of the economy has created financial problems for many people, and as a result, Americans have turned to their credit cards to make ends meet. While a credit card can be a convenient solution, it can also create major financial problems down the line as interest accrues and bills pile up. 

Credit card debt isn’t the only financial issue that Americans are facing. Medical debt and the cost of housing have also created issues for families who are struggling to get by. These issues may leave you feeling overwhelmed and helpless. 

No matter what happened that led to your financial difficulties, it’s important to know that you have options. Turning over a new leaf is possible. Scott N. Tisevich, Attorney at Law can help you look at your financial situation and determine the best path forward. He will be by your side as you try to do the right thing for your future. The Law Office of Scott N. Tisevich serves clients in Reno, Nevada, and throughout Churchill County, Lyon County, Carson County, and the nearby areas. 

What Not to Do Before Filing for Bankruptcy 

Are you unsure of what you should do as you consider your options for financial relief? Here’s what you should avoid doing to help your future financial situation. 

Don’t Use Your Retirement Account to Pay Off Debts 

You may have heard that you should break into your retirement accounts to pay off some of your creditors. However, your retirement accounts are protected during bankruptcy proceedings, so you shouldn’t use them to pay off creditors. Keep your retirement accounts for when you’ll need them in the future. 

Don’t Acquire New Debts 

If you are considering filing for bankruptcy, don’t take on any new debt. Opening a home equity line or securing a loan can indicate to the bankruptcy court that you were being irresponsible. New debt can create major issues. 

Don’t Move Assets 

You may have an asset that you particularly care about, such as a vehicle or home, that you are considering transferring to a family member or friend. Don’t move assets to protect them as it is illegal and won’t protect the asset during bankruptcy. Speak with a knowledgeable bankruptcy attorney to learn more. 

Don’t Forget to File Your Taxes 

Filing your taxes correctly is important every year, but it’s especially important when you’re considering filing for bankruptcy. Be honest and accurate when you file your taxes so that you have the best chance at a fresh financial start.  

Don’t Misrepresent Your Information 

Filing for bankruptcy requires that you accurately and honestly list all of your assets as well as your liabilities. If you lie about your assets to protect them or to qualify for a specific bankruptcy chapter, this could land you in serious trouble. Misrepresenting the truth will only complicate and delay the process. 

Don’t Selectively Pay Off Debts 

Are you planning on paying off a loan from a friend first? Unfortunately, you can’t pick and choose who to repay first. You need to follow the agreement reached with the bankruptcy court and not treat friends, family members, or certain creditors more favorably than others. If you do, this can result in the bankruptcy court taking action against you.  

Don’t File Without Legal Guidance 

While it may be tempting to submit the bankruptcy paperwork on your own, if you don’t file for the right chapter and in the right timeframe, it could cause even more problems. An experienced bankruptcy attorney can advise you of which chapter of bankruptcy you should file for in your situation.  

Chapter 7 bankruptcy and Chapter 13 bankruptcy each have their own sets of requirements, advantages, and disadvantages. A knowledgeable bankruptcy attorney can help you determine which type is best for your situation and can advise you when it’s the right time for you to file. 

Let the Law Office of Scott N. Tisevich Help 

Difficult times can create financial struggles, but you don’t have to live with these heavy financial burdens for the rest of your life. Speak with an experienced bankruptcy attorney to learn more about your financial options. Scott N. Tisevich, Attorney at Law has decades of experience assisting clients with legal and tax matters. He will help you seek a fresh start. Contact the Law Office of Scott N. Tisevich today to schedule a free consultation.