As a Mazon bankruptcy lawyer, I have seen many mistakes made by debtors in anticipation of filing. One such mistake is that they borrow money from family and friends. When you borrow from family and friends you become into a slave/master relationship. The family or friend that you borrowed from now becomes the master and you become the slave. Often times you don’t have the ability to pay that master back. When you file bankruptcy after you’ve borrowed money from family or friends you must list that family member or friend as a creditor on your bankruptcy petition. Not only will they receive notice of your bankruptcy filing but they’ll be prohibited from contacting you with regard to that debt; thus, you have probably ruined a friendship with either a family member or a friend.
Another problem is people try to give away or sell property for less than its fair market value prior to filing a bankruptcy. If someone had a vehicle that was paid off and they didn’t want the trustee to take it in a Chapter 7 bankruptcy and thought that they can just transfer it out of their name and then file bankruptcy they’re making a big mistake.
Under the bankruptcy laws and the bankruptcy petition and schedules you have to list all the property that you have and all of the property that you’ve given away or sold in the last two to four years. Once a Chapter 7 trustee realizes that you gave away and sold a car for less than its fair market value that trustee has the ability to undo the transaction and Long Arm it back. Once the trustee Long Arm’s it back he can then sell it and pay creditors a certain share of what’s left. He can do this under his role in the bankruptcy process.
The best advice that I can give you is that bankruptcy is for honest debtors who are struggling financially who need relief. Bankruptcy laws are some of the most gracious, helpful, friendliest laws that this country has. The right to file bankruptcy is a Federal law provided for in the U.S. Constitution; however that right does not come without certain rules and regulations. You simply cannot commit fraud and then file for bankruptcy. Bankruptcy protection is for the honest debtor who is entitled to a fresh start because he or she does not have the ability to repay his debts. My advice to you is find a bankruptcy lawyer that can help you.