Actions You May Want To Avoid If Planning To File BankruptcyDebtors looking to seek bankruptcy protection often are unable to make debt payments or want to have their debt reorganized so that it is easier pay on what is owed. Bankruptcy can help debtors deal with their finances but certain financial decisions made before filing may make your case more challenging and even decrease chances of getting qualifying debt discharged. Since bankruptcy laws can be complicated for those who are unsure about the process, it is important to review your situation with a bankruptcy attorney.

Some people look to make a payment to a creditor or someone they borrowed money from but this action may be scrutinized in the bankruptcy process if it is over $600 and it was made within 90 days of filing.  If you happen to fall on hard times you may think about cashing out your retirement funds.  This option is often not recommended for several reasons including the fact that retirement funds can be protected in bankruptcy.

If you have credit cards you should stop using them before filing.  This may come off as possible fraud if you use them regularly and then begin the filing process.  In many cases the debtor will still be responsible for paying what is owed on the card before bankruptcy.  If you have questions about what activity can be done before filing, such as transferring a balance, taking a cash advance or using the card for any purchase, you may want to review your intentions with a bankruptcy attorney.

Transferring or selling personal property right before filing bankruptcy may make your case more challenging.  This can include a house, vehicle or anything of value.  Sometimes the action looks suspicious, especially if it was done illegally.  Your bankruptcy attorney can review proper measures to take if you are interested in doing this type of transaction in order to avoid a legal chaos.