Do not liquidate your retirement accounts to pay off debt that can be discharged in bankruptcy. Retirement accounts enjoy broad protections in a bankruptcy so it is not a good idea to cash them out.
Do not take out an HELOC to pay off credit card debt that can be discharged in bankruptcy. Remember that credit card debt is unsecured debt meaning it is secured only by your signature, not collateral, a home or a car. If you pay off credit card with a HELOC, you not only risk losing your home if you cannot make the payments, you will not be able to discharge the debt.
Do not run up your credit card debt prior to filing bankruptcy. If you take out advances or make purchases within 70 to 90 days of filing, you may not be allowed to discharge the debt
Don’t be tempted to transfer, hide or sell assets to to avoid losing them in bankruptcy. With the possible exception of using proceeds of a sell to buy the basic necessities of life (which you would have to show) this could backfire in terms of getting a discharge and you may face criminal charges
During the bankruptcy process, your financial transactions will be scrutinized closely spanning up to 10 years. Do not intentionally transfer property, lavish gifts on family members, or make hefty payments favoring one creditor over another in the months or year/s before filing bankruptcy. The court can unwind or ‘claw-back’ these transactions and disperse the recovered funds to creditors.
If You’re Considering Bankruptcy
Contact An Experienced Illinois Bankruptcy Attorney To Avoid Mistakes
If you are considering bankruptcy protection, the best advice is to hire a bankruptcy attorney early on so you do not make costly mistakes. Contact the Peoria Illinois bankruptcy law offices of Charles E. Covey to schedule your free evaluation at 309-674-8125.
