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What Not To Do

If you are thinking about filing a chapter 7 or chapter 13 bankruptcy in Kansas it is a good idea to not do any of these things until you talk with your lawyer.  It looks like there are a lot of “don’ts” here, but talking to your lawyer prior to taking any action regarding these matters can avoid a lot of headaches for you later.  Do not hesitate to ask questions.  You are paying a fee for one reason--advice.   

1.         Don’t sell, give away or transfer ownership of anything prior to filing your bankruptcy case without first discussing it with your lawyer. Doing so could allow a bankruptcy trustee to go after the property

2.         Don’t use credit cards or incur more debt. Once you have decided to file a bankruptcy you should stop using credit cards or borrowing money.  If you continue to incur new debt prior to filing, it could prompt an objection from the creditor and you may be forced to repay the money. 

3.         Don’t pay money to family members or friends. Money paid to family members and friends within one year prior to your bankruptcy can be recovered by the bankruptcy trustee. If the amount paid is small, the bankruptcy trustee probably will not care, but it is wise to be cautious.

4.         Don’t pay back family or friends by transferring property. Transferring ownership of property to pay a debt owed to someone could allow the bankruptcy trustee to get the property back as a preference payment.

5.         Don’t leave assets off your bankruptcy forms, including lawsuits or claims you may have.  The only way to exempt an asset and protect it from the bankruptcy trustee is to list it and exempt in under the applicable Kansas exemption law, federal exemption law, or other state exemption laws if you have not lived in Kansas on long enough.  Intentionally leaving out an asset is a federal crime.  The much better choice is to candidly talk about all of your property with your lawyer, through proper pre-bankruptcy planning much can be done to protect assets. If this is not possible perhaps a chapter 13 bankruptcy could solve the problem.  Also, if you do not list your claim or lawsuit you may never be able to bring that suit in the future!

6.         Don’t take money out of retirement plans, IRA’s or 401K’s.  If you do, the money may no longer be protected. Talk with your lawyer about this if you really need to withdraw some money.

7.         Don’t file bankruptcy if you are expecting a large tax refund.  Why – the Trustee can take all or a portion of it.  The better choice is to postpone your bankruptcy if you can, receive the refund, then talk with your lawyer about where to spend the money that will not get you in trouble.  

8.         Don’t put your money into someone else’s bank account or put your name on someone else’s account.  A lot of people put their name on their elderly parent’s account “just in case.”  This is usually a bad idea.  If you want to be able to help mom or dad in case of disability or illness, a power of attorney is probably a better choice.

9.         Don’t get married or move in with someone, especially if that person has a high income.  Under the new bankruptcy law your spouse’s income may get counted and in some cases so does income from domestic partners and maybe even roommates or renters.  Discuss your plans with your lawyer before making any changes to living arrangements.

10.       If you receive a refund after you file your bankruptcy don’t spend it. If you do the trustee can sue you to collect the money and the court could revoke your discharge.

11.       Don’t fail to be fully candid with your lawyer. Your lawyer cannot give you good advice if he doesn’t know all the facts


Important Disclaimer: I provide this website for information and advertising purposes only. It is not intended to and does not constitute bankruptcy assistance services or specific legal advice on a specific matter.  As I am sure you understand, I can only offer to provide such people that participate in a telephone or office consultation directly with me. The information contained on this website does not and should not be construed as legal advice.  You should not act on any of the information contained in this website without first conferring with an attorney licensed in your jurisdiction. No attorney-client relationship or privilege is formed by visiting this site or by sending unsolicited email. Initial emails should not contain any confidential information or information you want to keep secret. I am licensed only in Kansas and Missouri and offer my services only in Kansas and Missouri. The applicable laws may have changed after the information on this website was published. While I strive to keep the information current, you should not presume that all information is up to date since laws change frequently.  You must confer with an attorney to be sure you have current information.  Sections 341, 342, 527(a) and 527(b) of the Bankruptcy Code require that an “assisted person” be given certain required disclosures and notices.  I urge every person who is considering bankruptcy to seek the advice of a competent attorney.

The choice of a lawyer is an important decision and should not be based solely upon advertisements.