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What Not to do Before You Meet with a Bankruptcy Attorney


You are eager to do something about your uncomfortable debt situation. You have been trying a variety of options and, while at times were making progress, you no longer feel that way and you want to look at other options, including bankruptcy.

You are impatient, and thinking about what you can do before your meeting with an attorney to make things a little better for you. You read, you think, and you want to take some action to show that you know what you are doing. You want to protect your assets.

You want to do something. Don’t.

Here are some of the actions that some of our clients have contemplated and, thank goodness, have generally not done:


1. Transferring property, such as a house, car, or other major asset to a family member or friend.

Transferring any items of value to anyone shortly before you file for bankruptcy is considered fraudulent unless you have received the money equivalent for that asset. If you transfer your Ford Mustang GT to your son, he better have paid you the market value for that asset. If not, the Court will get the Mustang from your son, sell it, and use the money to pay off your creditors when you file.


2. Hiding money or assets.

If you file for bankruptcy, you must disclose all of your assets and all of your debts. Hiding the money under your mattress doesn’t mean you don’t have it. It just means it is under your mattress, and you have to disclose this in the bankruptcy paperwork.


3. Using your charge cards or borrowing power for things you don’t need right before you file.

I have had clients say they have been advised to head to the stores  or shop online to “max out” their cards shortly before they file. It is highly unethical to do this and it is against the law. Your entire bankruptcy can be jeopardized, and you could still have to pay for the items anyway, so why take the risk?


4. Buy a new car or other major item just before filing, unless your attorney has approved it.

There are several reasons why you should not do this without the attorney’s permission. One is that people sometimes trade a vehicle that's worth less than they owe for a new one and then they are strapped with not only the new car payment, but an amount that includes the balance on their old vehicle. That's not a good thing to do.

Also if you purchase a major item without seeing the attorney first, you may be doing something that is the opposite of what the attorney has in mind for her or his strategy. So be patient and talk to the attorney first. There are circumstances when this is appropriate, such as when your car is dying and you need reliable transportation to get to work. or if the attorney says to give up the luxury vehicle with the high payment and get one with a much lower payment.

The bottom line is, speak to your attorney first before you make a move that you might regret. Give us a call at 800-360-9392.


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This entry was posted in debt, attorney, bankruptcy, Bankruptcy, credit card, Credit Card Debt