subject: 5 Do's And Don'ts When Filing Bankruptcy [print this page] As an Orlando bankruptcy lawyer, I often find myself advising clients not to do things they were planning on doing before they came in to see me. After all, that's why they are in my office, to get advice on how to handle their debt issues. Some of the actions they contemplate, if they did carry through with them, would result in disastrous outcomes for their bankruptcy. What follows are 5 quick Do's and Don'ts for anyone considering filing bankruptcy.
1. DO: When completing your bankruptcy petition, list all of your property and assets, as well as all of your debts and creditors.
Your bankruptcy petition is the paperwork they you fill out and your bankruptcy lawyer later files with the Court. The Debtor, the person filing bankruptcy, must reveal all of their assets and all of their debts in this petition. This is one of the main prerequisites when filing bankruptcy. In other words, you have to list everyone who you owe money to (including friends and family) and all of your possessions (even that old motorcycle your dad gave you).
2. DON'T: If you are represented by a bankruptcy lawyer, DO NOT call the Trustee's office.
Recently I attended a "brown bag luncheon" (us bankruptcy lawyers aren't the "wine and dine" type) with the Chapter 13 Trustee. At the luncheon, the Trustee made it very clear that if a client calls her office, only bad things could come of that call. In fact, she advised every Orlando bankruptcy lawyer to go back and tell our clients NOT to call her office. When a client calls in to the Trustee, their file immediately pops up on the screen. The person viewing that screen then looks for any little thing that may have gone unnoticed in the client's case. Is a Plan payment a little late? Was there a tax refund that previously went uncollected?
3. DO: Keep your bankruptcy lawyer updated about changes in your Income during a Chapter 13 case
When you enter into a Chapter 13 bankruptcy, it can go on for up to 5 years. Think of a Chapter 13 as a partnership between you and your bankruptcy lawyer. To reach the intended successful outcome, each party must perform their duties. One of the obligations of a person filing bankruptcy under Chapter 13 is to ensure their bankruptcy lawyer is aware of any changes in their income, whether an increase, or decrease, during the entire case. While you may be hesitant to let your bankruptcy lawyer know about an income increase, you must keep in mind that it does not always result in an increased plan payment.
4. DON'T: Give away or remove your name from expensive assets you own before filing bankruptcy.
This DON'T might be the biggest and most important. Just re-read the statement after DON'T above, it doesn't sound honest, does it? The bankruptcy Court certainly doesn't believe that it is. In fact, the Court calls this FRAUD and you can get in a lot of trouble for it. Transferring any property out of your name before filing bankruptcy is just something you shouldn't do.
5. DO: Disclose, Disclose, Disclose
There is a favorite saying in the bankruptcy lawyer community: "The three most important words in bankruptcy are Disclose, Disclose, Disclose". Yeah, we're such a clever bunch! The point is, when in doubt about whether to "list" an asset or anything really, in the Petition, Disclose it. Let everyone know about it. Maybe it turns out to be nothing important and you've lost nothing by the disclosure. On the other hand, maybe the non-disclosure is uncovered by the Trustee and interpreted as an attempt to mislead the Court. In that case, you may have just lost everything. Clients should take this saying to mean "Tell your bankruptcy lawyer everything".
While there are many, many more Do's and Don'ts when filing bankruptcy, these 5 will get you well on your way to a successful bankruptcy case.
