What Do I Need To Do Prior To Filing For Bankruptcy?
Prior to filing for bankruptcy, an individual should consult with an attorney. An attorney will be able to advise them on whether or not filing for bankruptcy is a wise decision, and what they would need to do in order to start the process.
Should I Sell Things Or Give Away Money Or Assets Before Filing For Bankruptcy?
If someone plans on filing for bankruptcy, then it is imperative that they do not give away money or assets beforehand, as doing so would be considered fraud. Prior to filing for bankruptcy, an individual is required to disclose the amount and type of assets they own. If it is discovered that assets were given away before filing for bankruptcy, then the bankruptcy trustee can recoup those assets from the persons to whom you gave the assets.
Transferring assets to friends or family prior to filing for bankruptcy is one of the worst things a person could do; not only will it make them look bad, but it will also cause stress for the recipients when they are being pursued by the bankruptcy trustee. That being said, an individual is allowed to sell assets at fair market value prior to filing for bankruptcy, but they must keep a paper trail of where the money went. If the money is used on something other than necessary and reasonable expenses, then the bankruptcy trustee can object to the bankruptcy. The wisest decision would be to discuss these matters with an experienced bankruptcy attorney before doing anything so that you know what you can and cannot do.
Is It Possible To Charge Up A Bunch Of Debt Before Filing For Bankruptcy?
The bankruptcy code has a provision that allows a creditor to object to bankruptcy if the debtor accrued significant amounts of debt prior to filing for bankruptcy. Additionally, the bankruptcy trustee could deny the discharge on the basis of bad faith. Finally, the debtor would have to explain what they purchased prior to the filing of the bankruptcy.
Should I Pay Back Any Family Or Friends I Owe Before Filing For Bankruptcy?
Bankruptcy court is a court of equity, which means that all creditors are supposed to be treated equally. In view of this, the bankruptcy code has a section that allows a bankruptcy trustee to recoup any payments made to family members or friends so that they can distribute it equally to all of the creditors. The trustee can go back as far as 90 days to recoup payments made to friends, and as far back as one year for payments made to family members.
What Are Some Questions That You Ask Clients To Determine Whether Or Not Bankruptcy Is Suited To Them?
One of the first questions I will ask a client is why they feel the need to file for bankruptcy, as the answer to this question will help me determine which chapter of the bankruptcy code will provide the greatest benefit. I will also use an intake form to obtain basic financial information regarding income, household size, assets, and debts, as well as personal information that will help me to provide them with the proper advice.
I will review a checklist of documents that will be needed in order to file for bankruptcy. If a client is going to file for Chapter 7 bankruptcy, then they will typically need to provide tax returns for the past two years, and if they are going to file for Chapter 13 bankruptcy, then they will need to provide tax returns for the past four years. A client will also need to provide paystubs and proof of all income, bank statements, any correspondence from creditors, and statements regarding their investments. Some investments such as 401(k) accounts can be protected, but others cannot.
For more information on Pre-Requisites Of Filing A Bankruptcy In IL, a free initial consultation is your next best step. Get the information and legal answers you are seeking by calling (630) 509-8989 today.
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