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Top Ten Things Not To Do Before Filing Bankruptcy.

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  1. Transfer things out of your name. A bankruptcy trustee can undo transfers that occur within 2 years of filing.
  2. Pay friends or family members. The trustee may recover these even though it was a payment on a legitimate debt. Rest assured you will not get invited to Thanksgiving dinner.
  3. Take money out of your 401k. This includes loans or withdrawals.  These funds are protected in bankruptcy.  Do not empty your retirement in a futile attempt to avoid bankruptcy.
  4. Borrow money against your home. This locks in the necessity to pay this debt according to its terms after filing to keep your home.
  5. Run up your credit cards. You can not get rid of the debt you incurred knowing that you were not going to pay it. Run ups are red flags to banks.
  6. Ignore court papers you receive. Even though you know you are going to file, you're not protected until your case is actually filed with the court.
  7. Get married. We have nothing against marriage, but getting married may change your eligibility to file bankruptcy even though you are filing on your own. Nothing will get your marriage off on the wrong foot more than sticking your spouse with your old debts.
  8. Agree to pay things in your divorce with the idea you will file bankruptcy. This is another kind of debt you may not be able to get rid of. If you are thinking of filing bankruptcy make sure your divorce attorney knows.
  9. File if you think you are about to get a sizeable inheritance. An inheritance is an asset that needs to be listed in a bankruptcy. It is an asset even if the person had not died on the date you filed your case. Another reason to make sure you tell your attorney everything.
  10. Get legal advise from your neighbor or even this website. Meet with an attorney. An initial consultation is free. Get the facts. Plan your future.

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