Planning For Bankruptcy
If you are considering bankruptcy, it is crucial that you plan your bankruptcy before taking any action. If you are in danger of foreclosure or repossession, please reach out to our office immediately as an emergency bankruptcy may need to be filed. However, if there is not an immediate threat, consider the following tips below so that when/if the time comes to file for bankruptcy, you will be in the best possible position.
Below are the Do’s and Do NOT’s when bankruptcy planning:
Do:
Do NOT:
Knowing what bankruptcy exemptions you can use will make ALL the difference when filing bankruptcy. Placing certain property under exemption may protect it by law from unsecured creditors. The bankruptcy laws allow certain exempt property that will protect the property from any unsecured creditor and unsecured debt. Unfortunately, there is a limit to the amount of property you can exempt. This is why hiring an experienced bankruptcy attorney should be your first step in fixing your financial problems. Hiring a bankruptcy attorney is the best way to make sure that you do not miss anything. You can also view “Bankruptcy Exemptions” by clicking here to learn more about how bankruptcy exemptions work.
You want to make sure that you list all creditors on your bankruptcy petition prior to filing. If a creditor is not listed, they may be able to collect on the debt after your bankruptcy discharge. This can be avoided by making sure to list all of your creditors and providing information such as account numbers and addresses so that the creditors can be properly notified.
It is not recommended to borrow money against your home to pay off unsecured creditors. One exception is if you paid off your home with a large amount of equity that exceeds your home exemption amount. If this happens, you may want to consider refinancing the home to pay the creditors. You can claim up to $175,000 as exempt for your home, but it varies for each person. Ultimately, you should speak with a qualified bankruptcy attorney in Riverside or San Bernardino County to get the best advice for your particular situation. Give our office a call and we will be able to provide guidance and help you make an informed decision about whether borrowing money against your home is a possible solution.
Retirement funds in California are secure from liquidation, meaning bankruptcy trustees cannot take them. Because of this, it is recommended that you not withdraw money from your certified retirement accounts prior to filing bankruptcy. It’s always good to do bankruptcy planning with your retirement in mind. Paying off a car loan or unsecured debts
Don’t wait until it’s too late – contact our office to get in touch with a Riverside Bankruptcy Attorney and explore the options available.
You should not transfer any of your assets to anyone prior to filing for bankruptcy. The bankruptcy trustee wants to make sure you’re not hiding any property from the court. Because of this, you can’t transfer valuable property to a friend or family member before filing for bankruptcy. If you do transfer assets before your bankruptcy, the court may consider the transfer to be fraudulent. If this happens, they can reverse the transfer or dismiss your case.
The United States Bankruptcy Code defines “fraudulent transfers” as any transfer by the debtor, within two years of the filing of bankruptcy, whether intended to be fraudulent or not, where the debtor received less than a “reasonably equivalent value in exchange for such transfer”. Basically, they want to make sure you are not giving away your assets to avoid including them in your bankruptcy. California state law also allows a 4-year look-back period under its Uniform Fraudulent Transfers Act (UFTA), with additional time for certain exceptions, but never longer than seven years.
If you are planning to file bankruptcy, you should not incur new debt. Any type of new debt such as credit cards, new loans, cash advances, etc before your bankruptcy can look like fraud to the courts. Both the trustee and credit card company would say that you are trying to defraud creditors. If you need to file bankruptcy in the near future, spending more money would be a huge risk and can lead to an unsuccessful bankruptcy discharge. Avoid any unnecessary expenses that could put the success of your bankruptcy in jeopardy.
If you pay back a friend or family member within one year of filing your bankruptcy, the bankruptcy trustee may be able to recover any money you gave them.
If you pay unsecured creditors within 90 days of filing, the bankruptcy trustee can also recover any payments made to unsecured creditors within 90 days of filing.
What you should do: wait until your bankruptcy case has been discharged to pay back any family or friends. This is the best way to protect everybody involved.
You should not touch your tax return refund until you speak with an attorney. If you spend a tax return refund and it is not covered by any exemptions, you may need to give your refund to the bankruptcy trustee. Spending the money could result in future problems with your bankruptcy case.
Bankruptcy planning can make a huge difference. You need to account for your property, regular mortgage payments, bank accounts, debts, creditors, child support payments, domestic support obligations, other loans, and more when preparing your bankruptcy plan. Having all the information needed for your bankruptcy plan takes time but it will make things go quicker and smoother.
Consult With an Experienced Bankruptcy Attorney
You should consult with a bankruptcy lawyer as soon as filing for bankruptcy may be necessary. An experienced attorney can help you determine which type of bankruptcy filing is best for you, as well as help you understand the legal process involved and what exemptions are available to you. You can give us a call at 909-915-0181 or 760-835-9353 to schedule your free consultation with our experienced bankruptcy attorney.
To schedule your FREE consultation with our bankruptcy attorney, please give us a call at (909) 915-0181 or (760) 835-9353.
The Law Offices of Edgar P. Lombera is a federally approved debt relief agency dedicated to helping individuals use bankruptcy as a step to a brighter financial future. Contact us today to learn more about your bankruptcy options.
