Pre-Filing Planning Bankruptcy can change your life. This is an important decision that should be carefully considered before you move forward. If you’re in a position that you’re facing immediate foreclosure or a repossession, then you should contact The Law Offices of Paul Y. Lee immediately. Otherwise, these are the things you’ll want to consider as you move forward.
Avoid incurring additional debt
You need a plan for your bankruptcy. You don’t want new debt, including cash advances, new loans, and credit cards. Why? Because this can look like fraud. Judges will consider a wide range of factors, including how many charges there were, the amount of the charges, your employment, and whether your purchases were luxury purchases or necessary for your life. They will then decide if debt can be discharged or not. Don’t risk a discharge just to incur new debt.
Never borrow money against your home
It’s never a good idea to borrow against your home for unsecured debt. Depending on your age, marital status, and health, you may be able to claim as much as $175,000 in your home as exempt during your bankruptcy process.
Of course, this is all assuming that bankruptcy is the right choice for you. In some case, for example if your home is paid off and you have high equity in it, you’ll exceed the exemption amounts. In that case, you may want to stick to non-bankruptcy options like refinancing your home or debt settlement plans. When you speak to the professionals at The Law Offices of Paul Y. Lee you’ll get the expert advice you need to learn more about your specific options.
Leave your retirement plans alone
In California, your retirement plans, including 401ks and IRAs, can be completely exempt from liquidation in a bankruptcy case. As a result, it’s best not to take any money out of any of your retirement accounts that qualify. Planning appropriately for your bankruptcy is essential. Contact The Law Offices of Paul Y. Lee at 951-755-1000 right away for more information.
Don’t pay back personal loans before filing for bankruptcy
Many people borrow money from their friends, family, and business partners when times are difficult. As everything gets worse, it’s common for debtors to want to pay back their personal loans before they file for bankruptcy simply because it seems like the right thing to do.
Unfortunately, the truth is that if you pay back a personal loan within one year of filing for bankruptcy, the court can consider it a preference transfer and the bankruptcy trustee may go as far as suing those family and friends to recover those payments. In addition, any payments you make to unsecured creditors within three months of your bankruptcy filing can be considered a preference transfer. You need to speak to the pros at The Law Offices of Paul Y. Lee before you more forward.
Declaring bankruptcy shouldn’t be an impulsive decision. At The Law Offices of Paul Y. Lee we can provide a free evaluation during which we’ll let you know more about your options and the best way to proceed.
