How to Protect Yourself During a Bankruptcy
If you’ve decided that bankruptcy is the best option for your financial future, it should feel like a huge weight off of your shoulders. The process can take several months, and in the meantime, you want to avoid doing anything that will delay your debt discharge or cause the trustee to think that you are engaging in fraudulent activity. With these tips, you can protect yourself and your financial future during bankruptcy.
Looking for the right bankruptcy lawyer for your needs? It’s time to talk to the team at Wilkins, Bankester, Biles & Wynne. Call us at 251-928-1915 to set up a meeting with our team.
Establish a New Account
A new bank account is essential if you are filing for bankruptcy. If any creditors have access to your current account, perhaps through a payment plan or past payments you have made, there’s always a risk that future payment requests will go through.
While this isn’t allowed, especially during the automatic stay, it has happened before. When it does, people have been left without the money they need to get through each week. Select a bank or credit union where you do not have any loans or lines of credit open and set up your paychecks to get deposited there.
Stop All Autopays
During bankruptcy, you should not be making payments on the debt that will be discharged. This can complicate proceedings. If extra payments are made before you file, they may be considered preferential payments. The trustee may need to claw back those payments and distribute them fairly amongst all of your creditors.
Autopays are the easiest way to trip up your finances during a bankruptcy. Go through every single one of your financial accounts and turn autopay off. Go one step further and remove your old account from these websites. This ensures that no unintentional payments are drawn from your closed bank account.
Get Rid of Your Credit Cards and Delete Them from Your Devices
If you are filing for bankruptcy, you must immediately stop using your credit cards. Even small purchases can cause huge issues with your case. Remember, you are asking the court to discharge that debt.
If you are intentionally adding more debt that you know you will not be paying, that is fraud. Get rid of your physical cards, and then delete the saved card information from every electronic device and website account you have. If you need to buy anything, you can only buy on debit for the duration of your bankruptcy case.
Figure Out a Budget
Part of succeeding after bankruptcy is figuring out what led to bankruptcy in the first place. As you work through your case, you will want to take a hard look at your income and expenses. Draw up a realistic budget, including everything you spend money on in a month.
Beyond just bills, this also includes groceries, gas, dining out, entertainment, and other expenses. Make sure that you have a budget you can realistically stick with after your debt is discharged. Consider making saving money a priority so that you don’t end up needing to take on extra debt to pay for emergencies.
Avoid Giving or Selling Anything
Selling items or giving them away can make the trustee suspect you of fraud. This is often done by people who want to avoid assets being seized to pay back creditors. They give items away or sell them at a very low price with the intent of taking them back after their debt is discharged. Don’t make bankruptcy harder on yourself this way.
Don’t Make Any Big Purchases
While many people do not have to give up any assets during bankruptcy, why put yourself in a position where you may have to surrender something? Don’t make any large purchases. Budget for them and consider holding off until after your bankruptcy is granted.
Talk to the Team at Wilkins, Bankester, Biles & Wynne
Having the right lawyer by your side throughout the bankruptcy process can limit your stress and help you look ahead to the future. Choose the team at Wilkins, Bankester, Biles & Wynne for the support and guidance you deserve. Call us at 251-928-1915 or get in touch online to set up a consultation at your earliest convenience.