Avoiding certain actions before filing for personal bankruptcy is essential or the process could be undermined. Having a free consultation with a Bankruptcy Lawyer In Olympia WA will provide insight on this subject. An appointment can be scheduled whenever someone starts considering filing for Chapter 7 or Chapter 13. Talking with an attorney early can prevent costly errors that may result in delays and may even lead to legal trouble.
If the person has already received notice of a lawsuit, the Bankruptcy Lawyer In Olympia WA should be notified. This might be a mortgage holder filing suit as part of the foreclosure process or a credit card company that has turned a delinquent account over to a law firm. These cases have gone beyond the normal collections activity and should not be ignored. The attorney will need to deal with these issues separately.
Taking on New Debt
Taking on new debt within three to six months before filing for bankruptcy is viewed skeptically by the court. The main exception to this would be unexpected medical bills, a situation the person had no control over. Financing a vehicle or running up credit cards by several hundred dollars will likely result in amounts that cannot be included in the bankruptcy filing. The person will still be responsible for these obligations.
Draining Retirement Plan Funds
Another poor strategy is to use money from retirement plans to pay creditors if bankruptcy is likely. Those accounts are exempt from the process and cannot be seized by creditors. This is one asset that the person will be able to keep, even when filing for Chapter 7 liquidation through a lawyer such as Rafal Gorski.
It can be tempting to transfer assets to relatives or close friends. However, if the court discovers that this has been done, it could terminate the option of filing for Chapter 7 or Chapter 13. In some instances, fraud charges could be filed. A person who transfers the title of an expensive car or boat to a relative two months before filing for bankruptcy may wind up in even bigger trouble than was the case before.