Posted Friday, February 26, 2010 by
Mark Zuckerberg
There’s a “not-to-do” list to follow before filing bankruptcy. As I explained in Monday’s Indiana bankruptcy blog post, you don’t want the bankruptcy trustee using “lookback” on you and discovering you’ve hidden or transferred assets in the two years leading up to filing
bankruptcy. As a bankruptcy lawyer in Indiana, I can tell you that the other thing not to do if you don’t want to be the victim of a “lookback” is to take cash advances totaling $750 or more from any one credit card in the 70 days leading up to your bankruptcy filing.
With close to twenty five years as a debt consolidation lawyer providing bankruptcy services in Indiana, I can add a very important item to the not-to-list list: Don’t expend emotional energy blaming anybody or anything for your financial troubles or, worse yet, blaming yourself. If you’re like just about every other client (and I’ve helped tens of thousands of people file personal bankruptcy in Indiana), you’re a responsible adult coping with setbacks beyond your control, just trying your best to stay afloat and take care of your own basic needs and those of your family.
On the other hand, as an Indiana lawyer for bankruptcy, I need to help clients work on their TO-do lists in preparation for filing personal bankruptcy in Indiana. Since it can be very important not only to do the right things, but to do those things in the right order, I always advise seeking legal help at the very first signs of a financial downslide.
Having helped to draft the new bankrukptcy laws in Indiana, the itemsI would include on my recommended pre-bankruptcy to-do list fall into four general categories:
Which bills to pay first, and in which order:
A big part of my work is helping debtors prioritize their bills. Those decisions are based on two considerations:
- The immediate-consequence category of bills, the ones where, if you don’t pay, you get hurt now because something gets turned off or taken away. This would include utility bills, rent or mortgage. Other immediate-consequences bills are federal tax bills, student loan, and child support. The consequences of not paying those could be having assets seized or having wages garnished.
- Some kinds of debt are not dischargeable in bankruptcy, so those are bills you want to pay first. Secured loans (mortgages and car loans), taxes, and child support and alimony payments would fall in this category. If there’s a good chance a debt might be discharged in bankruptcy, you probably don’t want to use your remaining dollars to make payments on that debt now. If you need student loan debt help, I can discuss that with you, but those bills will most likely need to be paid even after you file bankruptcy.
Papers to begin gathering:
At all four of the
Mark Zuckerberg bankruptcy law offices, we help you prepare the paperwork for bankruptcy, including exhibits, attachments, schedules, statements, lists, etc.. There are dozens of papers that must be correctly filled out, based on the information we help you gather.
What changes to make in your bank and investment company accounts:
If you have a bank account with the same institution that issued you a credit card, move your cash (checking and/or savings accounts) to a new bank that is not one of your creditors. That’s because, when you file bankruptcy, a creditor or brokerage firm can simply empty your account, using the money towards satisfying what you owe.
Things to do to turn off the pressure from creditors:
Earlier this week I recommended sending Cease and Desist letters to creditors who are harassing you in violation of the Fair Debt Collection Practices Act. (calling before 8 AM or after 9 PM, calling you at work, repeatedly talking to neighbors or other people about you, etc..) You can report violations to the office of the Indiana General Attorney or to the Federal Trade Commission.
Filing bankruptcy puts an immediate halt to all the pressures of collection efforts through the automatic stay, buying valuable time for debtors to gear up and organize their paperwork according to the new bankruptcy laws in Indiana.
So, whether it Chapter 13 banrkuptcy law in Indiana that you're considering, or filing Chapter 7 individual bankruptcy, be sure you’re making both pre-bankruptcy lists and “checking them twice”: the to-do list and the not-to-do list for filing bankruptcy in Indiana.