The inability to repay your debts can be overwhelming both emotionally and financially. If you are experiencing financial distress caused by crushing debt, filing for bankruptcy may be the best option to get the debt relief you need.   

However, declaring bankruptcy is not something to take lightly. The steps you take before filing Chapter 7 or Chapter 13 bankruptcy can affect your eligibility to get a discharge and the outcome of your bankruptcy case as a whole.   

Yes, filing for bankruptcy takes a lot of consideration and preparation. If you need a fresh start and want to get out of crushing debt, you can contact me today for legal advice. As a bankruptcy attorney at Oregon Fresh Start, I can put my four decades of experience to work for you. With offices in Hermiston and Bend, Oregon, I represent people who find themselves in difficult financial situations throughout the state of Oregon. 

What NOT To Do Before Filing for Bankruptcy  

While there are many things you should do to prepare yourself for a bankruptcy filing, there are also many things you should avoid before filing for bankruptcy. Knowing what not to do before filing for bankruptcy will help you steer clear of some of the common mistakes people make when they file for Chapter 7 or Chapter 13 bankruptcy.   

  • Use your retirement savings to pay off debts. One of the biggest mistakes to avoid before filing for bankruptcy is tapping into your retirement savings to pay off some of your debts. It is never a good idea to withdraw money from your retirement accounts to pay your creditors due to severe penalties and potential tax ramifications.   

  • Acquiring new debts. This might seem like a no-brainer, but racking up more debt in the months, weeks, or even days before filing for bankruptcy is a terrible idea. Many people think they can get away with acquiring new debts and discharging them through bankruptcy. However, the problem with this approach is that you may face fraud accusations if you take on new debts within 90 days of your bankruptcy filing.   

  • Transferring your assets. Contrary to popular belief, you cannot protect your assets by transferring them out of your name before the bankruptcy filing. In fact, if you move your assets by selling them or giving them away shortly before filing for bankruptcy, you could end up facing allegations of bankruptcy fraud.   

  • Not filing taxes. Failure to file tax returns before filing for bankruptcy can result in the dismissal of your case. The dismissal is only one of the many negative consequences of not filing taxes.   

  • Misrepresenting your information. The importance of providing accurate and complete information when filing for bankruptcy cannot be overstated. If you attempt to misrepresent your information (e.g., regarding the amount of debt you owe), you could end up getting your bankruptcy case dismissed, not to mention that providing false information could result in accusations of fraud.   

  • Selectively paying off your debts, especially debts owed to relatives. A common mistake people make before filing for bankruptcy is selectively paying off their debts. Many debtors think they can improve their financial situation by paying off some of their debts before they declare bankruptcy. However, doing so could jeopardize your bankruptcy filing. If this happens, the trustee assigned to your bankruptcy case could sue the creditor, including the relative, who received the payment to have the money returned and distributed equally among all your creditors.   

  • Waiting too long to file. The timing of your bankruptcy filing can make a huge difference. Unfortunately, many debtors make the mistake of waiting too long to file. This is a common mistake among debtors who are not 100% sure that filing for bankruptcy is the best debt relief option in their case. If you wait too long to file, you could end up falling deeper and deeper into crushing debt.   

  • Not consulting with an attorney. While filing for bankruptcy might seem like a straightforward process, it is not a good idea to declare bankruptcy before you speak with an attorney. A skilled attorney will review your financial situation to determine what chapter of bankruptcy will best fit your situation. A bankruptcy attorney will also help you understand all of the debt relief options that are available in your case before you file for bankruptcy.   

As a bankruptcy attorney with four decades of experience behind my back, I advise clients on what they should and should not do before filing for bankruptcy. At Oregon Fresh Start, I help debtors through every step of the bankruptcy process.      

The Importance of Experienced Legal Guidance  

If you are considering filing for bankruptcy because your debts are not manageable anymore, you may have questions about what steps to take before you declare bankruptcy. As a bankruptcy attorney at Oregon Fresh Start, I can guide you through your debt relief options and help you avoid mistakes when filing for bankruptcy. You can reach out to one of my offices in Oregon – in Bend or Hermiston – to get a free financial review. I also serve clients in Portland and Eugene, Oregon.

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