Before you see me you need to avoid common mistakes in bankruptcy planning. You need information about bankruptcy. Maybe you need to file. Perhaps you are looking to find the right attorney for a loved one. For whatever reason, you are here with me now. I want to tell you a story. It is about a person who came to see me very recently. She had an appointment the previous week. Because of family commitments she rescheduled to Monday. In the week between the original meeting and when she came in she did some things which will not prevent her from filing bankruptcy, but will cause her and her parents to lose assets they tried to protect. Consider this under the category of a “little knowledge can be dangerous.”
Everything I recount here is with her specific permission. She thought she saw online that it if you want to file bankruptcy, it is best to pay off as many bills as possible. She didn’t see that on this site! On top of that Mom wanted the money owed to her before she filed bankruptcy. Mom believes that possession is nine tenths of the law. Unfortunately the Ohio fraudulent conveyance law is the other 10%. So, the client cashed out her 401k. She paid Mom. She paid off some, but not all of her credit cards. She then paid off the loan on a truck worth over $10,000. I rate these actions as awful, bad, bad, bad and plain stupid. All mistakes in bankruptcy planning.
You can file bankruptcy and keep your entire 401k. Any money paid to family or insiders can be recovered by the trustee for the benefit of all creditors. That means Mom will have to cough up the money. Paying one creditor before another is a preference. Same deal as Mom. The trustee will get the money back to divide it with everyone. The truck is the worst. With a $6,000 loan the Ohio motor vehicle exemption will allow her to keep the truck including the equity. Since she paid it off there is now $10,000 equity. Only about $5,000 can be protected. Now the bankruptcy trustee will take the truck, sell it at auction and pay the woman the exemption. All said and done she will get to keep about $5,000 of the 401k she cashed out. The truck will be gone, and she still has to file bankruptcy.
Everything she did is addressed in a subpage on this site under “become a client,” and in the e-course. Sadly not everyone who visits the site opts in to get it, or clicks on all the pages. For the benefit of those who are afraid to give me contact information I am going to give you my 35 keys to success in bankruptcy. If you want to file bankruptcy you need to read them, believe them, and then act on them. On the other hand you can opt in. All you get is the course. I don’t invade your inbox with crap messages, ever.
35 Keys to Bankruptcy Success
- DO NOT leave out any Bank, Checking, Savings, Brokerage, Credit Union accounts.
- DO NOT use your credit cards.
- DO NOT take Credit Card Cash Advances.
- DO NOT use convenience checks offered from any credit cards.
- DO NOT do balance transfers between credit cards.
- DO NOT repay Family Members.
- DO NOT repay Friends.
- DO NOT tell anyone that you intend to pay.
- DO NOT leave assets off of your paperwork.
- DO NOT file if you are about to receive a tax refund or an inheritance. Discuss the timing with me.
- DO NOT fail to tell me about your small business, sole proprietorship, partnership, LLC, LLP, LC, corporation, or hobby.
- DO NOT purchase a home shortly before filing bankruptcy without consulting your attorney.
- DO NOT give away or gift any property to anyone.
- DO NOT pay more than $600 on any past due bill.
- DO NOT transfer (title or deed) property to anyone.
- DO NOT cash out, or borrow from retirement plans or 401k’s.
- DO NOT take out a second mortgage. An equity line is a second mortgage.
- DO NOT gamble.
- DO NOT hide your assets or debts.
- DO NOT take out “payday loans.”
- Do NOT enroll in television debt settlement.
- DO NOT put your money in your kids’ bank accounts.
- DO NOT ‘save’ a credit card for you to use after your bankruptcy.
- DO NOT fail to list debt or payment to family or other close friend
- DO NOT write bad checks.
- DO NOT borrow money.
- DO NOT forget to tell me about liens you may have on your home or unpaid judgments. They may be avoided and removed.
- DO NOT make any financial decisions without talking me first.
- DO NOT get married before filing if your spouse has a high income.
- DO NOT lie. I need some time off too, I don’t want to spend it in federal prison.
- DO NOT run up your credit cards in advance of filing bankruptcy.
- DO NOT fail to appear at State court hearings, trial or proceedings. At least go and tell them you are filing bankruptcy.
- DO NOT hide. Keep me up-to-date with your address, phone number and email address.
- DO NOT ignore requests from you bankruptcy trustee. Things can get bad in an instant if you don’t follow through as I instruct you.
- DO NOT bank where you owe money. Close the account and open another account somewhere else. Social Security debtors who do this have a lag time of a few months because it sometimes takes that long for SS to get it done. If you are pressed to file then clear out the account as soon as the deposit hits the bank. This also happens with payday loans. Many of these companies have a you sign a form to permit them to withdraw money from your account on a regular basis and these are nearly impossible to stop.
You can easily avoid these mistakes in planning to file bankruptcy. I am an experienced Cleveland bankruptcy lawyer. This is not the time to listen to friends, parents, or the guy sitting next to you in a bar. Even if they filed before, the laws change on a regular basis. What was alright before can throw you into a real tail spin now.
Other Attorneys playing the bankruptcy alphabet game:
- Philadelphia Suburban Bankruptcy Lawyer, Chris Carr claims M is for Matrimonial Law in Bankruptcy.
- Omaha and Lincoln, Nebraska Bankruptcy Attorney, Ryan D. Caldwell says M is for Means Test.
- New York Bankruptcy Lawyer, Jay S. Fleischman thinks M is for Means Test too.
- Colorado Springs bankruptcy Attorney Bob Doig says M is for Meeting of Creditors.
- Northern California Bankruptcy Lawyer, Cathy Moran feels M is for Modify.
- Northern California Bankruptcy Lawyer, Cathy Moran wants you to know M is for Monthly Income.
- Hawaii Bankruptcy Lawyer, Stuart T. Ing says M is for Mortgage Arrears.
- Marin County Bankruptcy Lawyer, Cate Eranthe blogs M is for Means Test, a popular topic.