The bankruptcy process can be made relatively quick and painless with the help of a qualified bankruptcy attorney. However, there are some things that debtors do which can make the bankruptcy process more painful than necessary.
Below are a few examples of how uninformed debtors raise the suspicions of the bankruptcy court:
- Giving inaccurate information about your income to the bankruptcy court. Stating your income correctly can be difficult if you’re self-employed or have several sources of income. However, it is important that debtors take the time to account for all income so that they don’t give the bankruptcy court a reason to believe they are trying to hide income.
- Withdrawing large amounts of cash from your bank account before filing bankruptcy. The bankruptcy court understands that you need cash to pay for daily expenses. However, withdrawing large amounts of cash and having no accounting for where it went can raise the suspicions of the bankruptcy court. If a debtor needs to withdraw large amounts of cash from their bank account they need to be prepared to show how they spent the money.
- Transferring assets such as real estate and tangible goods to others in the weeks and months leading up to a bankruptcy filing. The transfer of assets to those not related to you or in your circle of friends within a 90 day window will raise the suspicions of the bankruptcy court. But also any asset transfers made to family and friends within a year before filing bankruptcy will make the bankruptcy court believe you are trying to hide assets. Because many people don’t think about bankruptcy until only a few months before they file, debtors need to take a look back over the year and report any asset transfers made in that year to their bankruptcy attorney. The bankruptcy attorney may be able to work with the debtor to correct any illegal transfers.