Filing for Chapter 7 bankruptcy can be a difficult decision, but it is often the best option for people who are struggling with debt. However, there are some things that you should avoid doing before you file, lest you impact your chances of having your case approved. These are common mistakes that are easy to make, so be sure to keep them in mind if you are considering bankruptcy.

What to Know Before Filing Chapter 7 Bankruptcy

1. Don’t Hide or Transfer Assets

This can have serious consequences. It is illegal to hide or transfer assets with the intent of avoiding creditors, and it could result in criminal charges being brought against you if done intentionally. 

You will need to provide a full list of your assets and liabilities, as well as proof of income, such as pay stubs or tax returns. Not providing this could result in your case being denied.

2. Don’t Use Your Credit Cards

Doing this will look as though you are trying to scam your credit card company by making large purchases on credit before declaring bankruptcy. This may be considered credit card fraud and can be prosecuted as a crime in some cases. If you must make large purchases, use cash or another form of payment.

3. Don’t Pay Back Family Debt

It is illegal to pay back certain family members or friends before filing for bankruptcy, as doing so can be considered “preferential treatment.” If you owe money to a family member, pay them back after your bankruptcy case is settled. Ignoring this advice could result in your filing being denied.

4. Don’t Borrow Money

When you file for bankruptcy, debts that have been incurred in the last 90 days may not be discharged and could have to be repaid. This includes any loans you have taken out during this time period. If you have to borrow money, wait to do so after your bankruptcy case is settled.

5. Don’t Wait Too Long to File

Waiting will give creditors more time to take legal action against you, which could make the process more complicated and difficult. It may also make it more difficult for you to qualify for certain other types of filings, if needed, such as Chapter 13 bankruptcy. To avoid this problem, speak with an attorney as soon as possible to get the process started, then follow their advice to ensure that everything goes smoothly.

If you’re considering Chapter 7 bankruptcy, Arnold Law Offices can guide you through the process from start to finish. These compassionate and tireless attorneys have helped countless clients across St. Clair County, AL, to successfully achieve their debt relief goals. They’ll give your case the personalized attention it deserves and help you find the most effective ways to address your situation. Call (205) 338-6565 to schedule a consultation or visit them online to learn more about their services.