This Law Firm is a Debt Relief Agency as defined under Section 101 of the United States Bankruptcy Code. We help people file for Bankruptcy relief under the Bankruptcy Code. (Disclosure Pursuant to 11 U.S.C. 528).

If you are considering bankruptcy, you should avoid the following:

1. Paying a family member or friend, or transferring property

Do not pay any money to a family members, or friends, without consulting a lawyer.  The bankruptcy code requires you to disclose any amount paid or property transferred to family members, friends, or anyone else that the code considers an “insider” within the two year period prior to filing bankruptcy. It is a federal felony to fail to disclose this information.  Any such payment or transfer can be avoided by the bankruptcy trustee and your friend or relative will likely be required to pay back the money, or return the property, to the bankruptcy trustee for distribution to your creditors.  Before you pay back loans, or transfer property, to friends or relatives, consult your attorney to see if there are legal ways to avoid loss of the property.

2. Running up your credit cards; obtaining new credit cards or loans

Charging on a credit card or borrowing from any other lender when you do not have the ability (or intention) to repay is considered fraud.  The creditor can object to the discharge of the debt in your bankruptcy case, and you may be ordered to pay the creditor’s legal fees.  As hard as it may be, you must stop charging on your credit cards when you know that you cannot keep up your payments.

3. Borrowing against, or cashing in, your 401K or other retirement plan

More often than not, these “last-ditch” efforts to avoid bankruptcy fail.   Your 401k plan, IRAs and pension plan are normally exempt and protected in a bankruptcy filing.  It would be quite unfortunate to wipe out your retirement savings to pay debt, when you could have filed bankruptcy and kept them.

4. Borrowing against your house

Unless a second mortgage or refinancing completely solves your financial problems, you are merely compounding your problems.  If you can’t afford the new mortgage, then you are just as poor as before, but now you will lose your house instead of keeping it in a bankruptcy case.  Consult an attorney before for using a loan against your home to pay off debt or get cash out.

5. Payday Loans, especially “online” payday loans, or writing bad checks

Checks are harder to deal with in bankruptcy.  The holder of the check can continue to try to cash it even after you file, which then requires you to place stop-payment orders on the checks with your bank, or even close your bank account.  Keep in mind that writing a bad check is a felony in the State of Missouri, and bankruptcy offers no protection against criminal prosecution.

6. Waiting too long to file

If you delay filing bankruptcy, you are likely to be sued by your creditors.  Once a creditor has obtained a judgment, your wages or bank accounts can be garnished.   If you own a home, the judgment will normally become a lien against your property, which is not extinguished by merely filing a bankruptcy.  Too often, persons needing bankruptcy relief wait until they have spent their last dollars in a hopeless effort to stay current or catch up on their debts, or have been garnished, and as a result have no money available to hire an attorney.  Don’t let this happen to you.  Be realistic with yourself about your ability to pay.  You will avoid months or years of stress, and start fresh sooner.

8. Filing too soon

Sometimes, the desire to file and start fresh is strong.  Your lawyer may advise you, however, to wait.  Filing too soon may cause you to lose assets, like pending tax refunds.  There may be other good reasons to wait.  It is never too soon, however, to consult with a lawyer.

Our firm has over 20 years experience providing bankruptcy services to the public. We do more than just prepare forms. We are a law firm. We render legal advice and represent you in court.

We provide personal service which addresses your particular needs. Your case will be handled by a licensed attorney, not a paralegal or legal assistant.

Click here NOW to access our Bankruptcy Questionnaire and filing requirements

DISCLAIMER: THE PRECEDING INFORMATION WAS OF A GENERAL NATURE AND NOT MEANT TO CONSTITUTE LEGAL ADVICE OR TO BE USED IN, OR APPLIED TO, ANY INDIVIDUAL SITUATION. THIS GENERAL INFORMATION IS APPLICABLE TO THE STATE OF MISSOURI AND MAY NOT BE VALID UNDER THE LAWS OF OTHER STATES. IF THE READER HAS SPECIFIC LEGAL QUESTIONS, HE OR SHE SHOULD CONTACT AN ATTORNEY.