Preparing to File Bankruptcy (Continued)

File BankruptcyMost bankruptcy attorneys will provide a workbook to their clients to fill out before the case is filed.  It is very important to read the questions very carefully and to fill out each answer completely.  Errors in the bankruptcy petition are ultimately the debtor’s problem, since they sign the documents under penalty of perjury.  It is important that the information in the petition, schedules, and statements is accurate and complete.  However, debtors shouldn’t fill out the workbook until they are ready for their case to be filed.  Much of the information in the workbook is time-sensitive.If the workbook is filled out now but the case isn’t file for several months, then much of the information in the workbook will be out-of-date and will need to be supplemented.  It is better to fill out the workbook a week or two before the debtor intends for the case to be filed.

Debtors who are preparing to file bankruptcy should not sell, transfer, or otherwise dispose of property prior to filing bankruptcy.  These types of transfers can create problems for the debtor once a bankruptcy case is filed, so it is important to speak with a local bankruptcy attorney before disposing of property.  Similarly, debtors who are considering filing bankruptcy should refrain from paying back any debts owed to family members during the year before filing bankruptcy.  These payments are called preferences and the trustee can contact the recipient of these payments and order them to pay the money to the trustee so the funds can be disbursed to all unsecured creditors equally.

Debtors who are considering filing bankruptcy should also refrain from working voluntary overtime and second jobs unless they are prepared to continue doing so during the pendency of the bankruptcy case.  Extra income can cause debtors to become ineligible for Chapter 7 bankruptcy or to have a higher payment in Chapter 13 bankruptcy cases.  It is always best to discuss changes in income with a bankruptcy attorney as soon as possible to determine if they will affect the bankruptcy case.