If you are struggling financially, there are steps you can legally take that can help protect some of your assets from creditors. The first thing is to stop borrowing money, either from credit cards or other lines of credits. Don’t transfer money in anyone else’s name or purchase large ticket items – like jewelry or cars – in an attempt to hide funds.
If you have bank accounts at a bank that you owe money to, financial experts recommend transferring those funds to another bank who you don’t owe money to. Legally, a bank can seize funds in your accounts if you cannot keep up with your payments.
Retirement funds are protected from creditors. Continue to make your usual deposit amounts. However, it’s a bad idea to open up new accounts with large deposits. That action could be frowned upon by the bankruptcy court as an attempt of hiding assets.
Late payments on your car loan mean your vehicle can be repossessed at any time. So make sure you remove all personal items from your car, just in case.
Sometimes when people are considering filing for bankruptcy, they attempt to conceal some of their assets. Regardless of the motivation behind it, it’s never a good idea to conceal assets. If you don’t list all your assets in your bankruptcy and that failure is later discovered, you will not be granted a discharge. However, you will still be in bankruptcy and your assets will be taken by the trustee in order to pay off your debts. Hiding assets in bankruptcy is considered a criminal offense and if found guilty, you can be fined and receive a prison sentence.
If you are considering filing for bankruptcy, don’t make the mistake of thinking you can hide any assets in order to avoid losing these assets to creditors. If the trustee that is assigned to your case discovers any of the following activity, it could jeopardize your bankruptcy.
Any transfer of assets in order to protect them from creditors is forbidden. There are legal ways to protect assets and a bankruptcy attorney, like a bankruptcy lawyer in Tampa, FL, can help with those. For example, if you have a car that has been paid off and it is registered in your name, your attorney may be able to help you retain ownership. However, if you transfer ownership of that vehicle right before filing your bankruptcy, there may be nothing the attorney can do to keep it from being counted as assets that will go to creditors.
The same applies for any cash advances you might be thinking about taking before you file, with the intention of not having to pay those funds back. This could be considered fraud and you could have to pay it back.
Do not make any cash payments to family members that you may owe money to. Bankruptcy courts consider all creditors as equal, so although you may feel that paying your mother-in-law the money you owe her is more important than paying your credit card company, the courts do not.
If your name is on a trust or you have a pending inheritance coming, you need to disclose this information to the bankruptcy court. This also pertains to any lawsuits that you are about to file, or already have pending, including any worker compensation lawsuits. Any such litigation could be considered assets; therefore, the trustee needs to be informed of their existence.
Bankruptcy can be a complicated process and planning ahead is important. If you’ve decided to file, contact a qualified bankruptcy attorney to make sure your case is handled properly.
Thanks to our friends and contributors from the Law Office of Michael A. Ziegler, P.L. for their insight into bankruptcy.