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What Not to Do Before Filing For Bankruptcy

Christopher J. Kane, P.C. June 22, 2023

Women Upset While Looking at Bankruptcy FormIn Oregon, filing for bankruptcy offers a promising debt relief option for individuals and businesses experiencing financial distress. However, when considering bankruptcy, what you do—or do not do—before filing can affect the outcome of your case. Getting reliable legal counsel is crucial to understanding the filing process and to avoid making costly mistakes in your bankruptcy petition. 

Attorney Christopher J. Kane is ready to guide clients in the legal matters of bankruptcy. As a dedicated Oregon bankruptcy attorney, Christopher J. Kane can enlighten you about what to do or avoid doing before filing for bankruptcy and walk you through the legal procedures involved.  

No one should have to go through the bankruptcy process alone. The firm proudly advocates for clients in Portland and surrounding areas throughout Oregon, including Yamhill, Columbia, Washington, and Clackamas counties. If you feel like bankruptcy might be the solution, set up a free initial consultation today. 

What NOT To Do Before Filing for Bankruptcy 

When contemplating bankruptcy in Oregon, understanding the entire process—and what to do or avoid doing—is imperative. Challenges might arise in your bankruptcy case, and it’s important to know how to approach them. If you're thinking about filing for bankruptcy in Oregon, here are some tips: 

Don't Pay Off Debts Using Your Retirement Account 

Before filing your bankruptcy petition, do not make the mistake of withdrawing money from your retirement account to pay off debts. Generally, bankruptcy protects your retirement savings, and some of your debts will be eliminated after filing your petition. Be sure that you discuss with your bankruptcy attorney to understand your options. 

Don't Acquire New Debt 

Do not take out new loans or acquire new debts between 70 and 90 days prior to your bankruptcy petition. The lender may file an "adversary proceeding" against you to object to your bankruptcy discharge, claiming that you took out a new loan without any intent to repay. 

Additionally, the Oregon bankruptcy court may consider this as "presumptive fraud." The court will categorize the new debts as non-dischargeable. Even if you need to take a new loan, the funds should be for your essential needs—clothing, food, and utilities —and only your essential needs. 

Don't Move Assets 

When thinking about filing for bankruptcy, avoid selling, hiding, or transferring your assets and personal belongings to friends and families for safekeeping. These actions may lead to criminal penalties, and the court may deny your bankruptcy discharge entirely. 

Don't Misrepresent Your Information 

In addition, only provide correct and accurate details in your bankruptcy paperwork. Do not misrepresent even the slightest information. All information about your income, assets, finances, expenses, and debts needs to be accurate. Keep in mind that you may be subject to jail time, fines, or other criminal punishments for intentionally misrepresenting your information. 

Don't Fail to File Your Taxes 

You must file all necessary tax returns for the tax periods ending within four years prior to your bankruptcy petition. Upon filing your petition, the court will use the information in your tax returns to calculate your property holdings, past and current earnings. Failure to file your tax returns—and failure to pay current taxes during bankruptcy—might make the court dismiss your case. 

Don't Pay Off Debts Selectively 

Avoid settling your debts selectively. For instance, you might be tempted to intentionally pay close relatives or certain creditors first before you file. This is referred to as "preferential transfer." Such selective payments may either be undone or recovered from the recipient by the bankruptcy trustee through an adversarial proceeding. The trustee must ensure that creditors are settled in equal shares. 

Don't File Without Legal Guidance 

Lastly, always reach out to experienced legal guidance when filing your bankruptcy petition. A skilled bankruptcy lawyer understands the state's bankruptcy laws and requirements and can guide you through the legal processes involved. Ultimately, your bankruptcy attorney can explore your options, help determine the right chapter for your financial situation, and help ensure a seamless and successful petition. 

An Attorney Can Help You Steer Clear of Pitfalls 

Filing for bankruptcy in Oregon typically involves several complex processes. Understanding your bankruptcy options and knowing the right time to file is crucial. Attorney Christopher J. Kane has devoted his career to helping clients navigate the complexities of debt relief and bankruptcy.

As your attorney, Christopher can help you understand your different bankruptcy options and determine which one is right for you. Attorney Christopher J. Kane will help complete and submit your bankruptcy forms and documentation, represent you in court, and guide you toward the fresh financial start you deserve.

Contact Christopher J. Kane, P.C. today to schedule an initial consultation with a knowledgeable bankruptcy lawyer. Attorney Christopher J. Kane can offer you the reliable legal guidance and advocacy you need to make intelligent decisions in your bankruptcy case. The firm proudly serves clients in Portland and surrounding areas throughout Oregon, including Clackamas, Washington, Columbia, and Yamhill counties.