If your New Year’s resolution is to file for bankruptcy, there are some steps you should take to prevent the holidays jeopardize your bankruptcy.
One of the greatest mistakes that people make during the holidays is over spending. It’s very easy to become wrapped up in the season of giving, however your trustee won’t appreciate the sentiment if you’re gifting your assets to friends and relatives. Once you file for bankruptcy the trustee will look for any assets that were transferred, whether it was money or property. You risk your bankruptcy case being dismissed if it’s perceived that any assets were gifted to defraud the bankruptcy system.
If bankruptcy is on the horizon, chop up those credit cards. Even if you have available credit you should refrain from using it. When you file for bankruptcy the credit card companies will review the past 90 days to see if you used your credit cards without making an effort to pay for the items bought. If you purchased holiday gifts with your credit cards and made no attempt to pay off the debt, that debt may be considered non-dischargeable. The same goes for taking out a cash advance within 70 days of your bankruptcy. It can also be presumed to be non-dischargeable if no attempt was made to repay the loan.
Filing for bankruptcy is complex. Don’t let the holidays jeopardize your bankruptcy. Before making any holiday purchases that could jeopardize your bankruptcy dischargeablity, have a consultation with Minnesota Bankruptcy Attorney Gregory Wald.