{"id":395,"date":"2013-05-24T10:52:05","date_gmt":"2013-05-24T14:52:05","guid":{"rendered":"http:\/\/thegraftonfirm.com\/?p=395"},"modified":"2022-02-14T04:46:34","modified_gmt":"2022-02-14T09:46:34","slug":"the-7-worst-things-you-can-do-before-filing-bankruptcy","status":"publish","type":"post","link":"https:\/\/thegraftonfirm.com\/bankruptcy\/the-7-worst-things-you-can-do-before-filing-bankruptcy","title":{"rendered":"The 7 Worst Things You Can Do Before Filing Bankruptcy"},"content":{"rendered":"<p>There are some really dumb things you can do before filing Bankruptcy.\u00a0 As a Baltimore County Bankruptcy Attorney, I wanted to share with\u00a0 you some of my thoughts on the 7 worst things you could do before filing.\u00a0 These are not necessarily in order of bad idea, because what is bad for you, may not be as bad for someone else.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"7_Cash_Out_Retirement\"><\/span>7.\u00a0 Cash Out Retirement<span class=\"ez-toc-section-end\"><\/span><\/h2><div id=\"ez-toc-container\" class=\"ez-toc-v2_0_65 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<label for=\"ez-toc-cssicon-toggle-item-662c38a0b716e\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-662c38a0b716e\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/thegraftonfirm.com\/bankruptcy\/the-7-worst-things-you-can-do-before-filing-bankruptcy\/#7_Cash_Out_Retirement\" title=\"7.\u00a0 Cash Out Retirement\">7.\u00a0 Cash Out Retirement<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/thegraftonfirm.com\/bankruptcy\/the-7-worst-things-you-can-do-before-filing-bankruptcy\/#6_Pay_off_favored_creditors_robbing_Peter_to_pay_Paul_before_filing_bankruptcy\" title=\"6.\u00a0 Pay off favored creditors (robbing Peter to pay Paul) before filing bankruptcy\">6.\u00a0 Pay off favored creditors (robbing Peter to pay Paul) before filing bankruptcy<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/thegraftonfirm.com\/bankruptcy\/the-7-worst-things-you-can-do-before-filing-bankruptcy\/#5_Take_Cash_advances_to_repay_friends_and_family_members\" title=\"5.\u00a0 Take Cash advances to repay friends and family members.\">5.\u00a0 Take Cash advances to repay friends and family members.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/thegraftonfirm.com\/bankruptcy\/the-7-worst-things-you-can-do-before-filing-bankruptcy\/#4_Max_out_your_credit_cards_intentionally_before_filing_bankruptcy\" title=\"4.\u00a0 Max out your credit cards intentionally before filing bankruptcy\">4.\u00a0 Max out your credit cards intentionally before filing bankruptcy<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/thegraftonfirm.com\/bankruptcy\/the-7-worst-things-you-can-do-before-filing-bankruptcy\/#3_Hire_the_cheapest_Baltimore_County_Bankruptcy_attorney\" title=\"3.\u00a0 Hire the cheapest Baltimore County Bankruptcy attorney.\">3.\u00a0 Hire the cheapest Baltimore County Bankruptcy attorney.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/thegraftonfirm.com\/bankruptcy\/the-7-worst-things-you-can-do-before-filing-bankruptcy\/#2_Lie_to_your_Baltimore_County_Bankruptcy_Attorney_or_withhold_information\" title=\"2.\u00a0 Lie to your\u00a0Baltimore County\u00a0Bankruptcy Attorney or withhold information.\">2.\u00a0 Lie to your\u00a0Baltimore County\u00a0Bankruptcy Attorney or withhold information.<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/thegraftonfirm.com\/bankruptcy\/the-7-worst-things-you-can-do-before-filing-bankruptcy\/#The_truth_always_comes_out%E2%80%A6\" title=\"The truth always comes out&#8230;\">The truth always comes out&#8230;<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/thegraftonfirm.com\/bankruptcy\/the-7-worst-things-you-can-do-before-filing-bankruptcy\/#1_Dont_hire_a_Baltimore_County_Bankruptcy_attorney_at_all\" title=\"1.\u00a0 Don&#8217;t hire a Baltimore County Bankruptcy attorney at all.\">1.\u00a0 Don&#8217;t hire a Baltimore County Bankruptcy attorney at all.<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/thegraftonfirm.com\/bankruptcy\/the-7-worst-things-you-can-do-before-filing-bankruptcy\/#Its_not_as_easy_as_it_looks_even_for_paralegals_who_have_been_doing_this_for_years\" title=\"It&#8217;s not as easy as it looks, even for paralegals who have been doing this for years\">It&#8217;s not as easy as it looks, even for paralegals who have been doing this for years<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n\n<p>There is a growing problem in this country of people not being able to exit the work force.\u00a0 Despite reaching advanced age, they are forced to keep working because social security will not be enough to support them, the days of generous pensions are waning,\u00a0and very few of us have properly saved for retirement.\u00a0 In fact, many American families owe more money than they have in retirement savings.\u00a0 This alone is a good enough reason why cashing out retirement can make a list of bad ideas.\u00a0 In the bankruptcy context, however, it gets worse.<\/p>\n<p>You see, when you owe a creditor money, they have various ways of collecting that money from you outside of bankruptcy.\u00a0 If you do not pay, they can get a judgment and garnish your wages or your bank accounts.\u00a0 They can attach your various property.\u00a0 What they cannot do is touch any retirement accounts that are covered under certain sections of the tax code.\u00a0 This covers 401k&#8217;s 403b&#8217;s and most IRA&#8217;s.\u00a0 If you cash out your retirement and put that money in the bank, it&#8217;s no longer protected.\u00a0 These protections and this glaring exception to the protection apply in bankruptcy as well.\u00a0 Cashing out retirement, except for certain specifically defined types of rollovers, put your retirement in danger of being seized and used to pay your past debts, instead of being used to fund your future retirement.<\/p>\n<figure id=\"attachment_407\" aria-describedby=\"caption-attachment-407\" style=\"width: 300px\" class=\"wp-caption alignnone\"><a href=\"https:\/\/thegraftonfirm.com\/wp-content\/uploads\/2013\/05\/DSC00195.jpg\"><img fetchpriority=\"high\" decoding=\"async\" class=\"size-medium wp-image-407\" src=\"https:\/\/thegraftonfirm.com\/wp-content\/uploads\/2013\/05\/DSC00195-300x225.jpg\" alt=\"How can a Maryland Bankruptcy Attorney help you avoid repossession, stop a foreclosure, or shut down a garnishment (and potentially get your money back?)\" width=\"300\" height=\"225\" srcset=\"https:\/\/thegraftonfirm.com\/wp-content\/uploads\/2013\/05\/DSC00195-300x225.jpg 300w, https:\/\/thegraftonfirm.com\/wp-content\/uploads\/2013\/05\/DSC00195-1024x768.jpg 1024w, https:\/\/thegraftonfirm.com\/wp-content\/uploads\/2013\/05\/DSC00195-768x576.jpg 768w, https:\/\/thegraftonfirm.com\/wp-content\/uploads\/2013\/05\/DSC00195-1536x1152.jpg 1536w, https:\/\/thegraftonfirm.com\/wp-content\/uploads\/2013\/05\/DSC00195-2048x1536.jpg 2048w\" sizes=\"(max-width: 300px) 100vw, 300px\" \/><\/a><figcaption id=\"caption-attachment-407\" class=\"wp-caption-text\">Retirement savings is for your retirement, not to fatten the coffers of JP Morgan<\/figcaption><\/figure>\n<h2><span class=\"ez-toc-section\" id=\"6_Pay_off_favored_creditors_robbing_Peter_to_pay_Paul_before_filing_bankruptcy\"><\/span>6.\u00a0 Pay off favored creditors (robbing Peter to pay Paul) before filing bankruptcy<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>As a Baltimore County Bankruptcy Lawyer, I see this a lot.\u00a0 They will have a certain creditor that they feel has been good to them, or with whom they&#8217;ve had a long relationship.\u00a0 In order to satisfy this one creditor, they will take out additional credit with other banks to pay down this one in the hopes that they can &#8220;keep it&#8221; after bankruptcy.<\/p>\n<p>Let me just start with this premise.\u00a0 If you know or have a strong inclination that you will be filing bankruptcy and you use your credit cards, you&#8217;re committing fraud.\u00a0 If you know you cannot repay a debt and incur it anyway, that&#8217;s stealing.\u00a0 So the saying &#8220;Robbing Peter to pay Paul&#8221; is quite appropriate.\u00a0 In the bankruptcy context, you can find yourself with a discharge denied to you for these accounts.\u00a0 If you&#8217;ve done this in anticipation of filing bankruptcy, talk to your lawyer.<\/p>\n<p>&nbsp;<\/p>\n<h2><span class=\"ez-toc-section\" id=\"5_Take_Cash_advances_to_repay_friends_and_family_members\"><\/span>5.\u00a0 Take Cash advances to repay friends and family members.<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Another issue that comes up a lot in connection with this practice is that of preferential transfers.\u00a0 You see, the Bankruptcy Trustee is allowed to go to some of your normal creditors that you&#8217;ve paid a good bit of money to in the 90 days before filing and demand that they give that money to the Estate.\u00a0 Then they use that money to pay themselves a fee and divide the rest up amongst all your creditors.\u00a0 With friends and family the news is worse.\u00a0 Debts repaid to &#8220;insiders&#8221; can be recovered up to a year in the past.\u00a0 And if that mother, father, son, daughter, or business partner doesn&#8217;t have the money anymore?\u00a0 The trustee can garnish them just like your creditors could have garnished you.<\/p>\n<p>Cash Advances taken on a credit card are another big issue.\u00a0 There is a presumption of intended fraud when you take these too close to the time you file for bankruptcy.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"4_Max_out_your_credit_cards_intentionally_before_filing_bankruptcy\"><\/span>4.\u00a0 Max out your credit cards intentionally before filing bankruptcy<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>As we&#8217;ve previously discussed, using your credit cards in anticipation of a bankruptcy is fraud.\u00a0 A little bit may not get much attention from a creditor, but if you go out and intentionally run up a balance, they&#8217;ll be able to tell after the fact, and you can bet you&#8217;ll be getting a notice from their attorney soon.\u00a0 If you&#8217;ve used your credit cards and find that you need to file for Bankruptcy soon, talk to your Baltimore County Bankruptcy Attorney to see what actions you can take to mitigate.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"3_Hire_the_cheapest_Baltimore_County_Bankruptcy_attorney\"><\/span>3.\u00a0 Hire the cheapest Baltimore County Bankruptcy attorney.<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Compared to other legal services, Bankruptcy is actually relatively inexpensive given the amount of time attorneys usually spend on one case.\u00a0 If I see an attorney offering really cheap bankruptcies, I can guess that either the attorney is rushing the job, or having lower paid staff doing things that the attorney should be handling, such as document review, legal analysis, client intake, etc.\u00a0 If you&#8217;re a lawyer charging $500 for a chapter 7 bankruptcy, you would have to do a LOT of them to get by meaning you&#8217;re stretching yourself thin and spending less time on every case than you should.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"2_Lie_to_your_Baltimore_County_Bankruptcy_Attorney_or_withhold_information\"><\/span>2.\u00a0 Lie to your\u00a0Baltimore County\u00a0Bankruptcy Attorney or withhold information.<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Relationships are about trust.\u00a0 This is true for your marriage, your relationship with your children, and your business relationships.\u00a0 This is especially true with your lawyer.\u00a0 Your bankruptcy attorney is preparing legal documents for you, that he will file with the court.\u00a0 You and he will sign these documents and by signing them swear that everything is true and correct to the best of your knowledge, information, and belief.\u00a0 If you know something is not true or just believe something is not true you need to tell your lawyer.<\/p>\n<p>If you intentionally hold something back, you risk losing not just the trust of the one person you&#8217;re paying to be on your side, but also potentially your freedom.\u00a0 Just this past month, a woman in Montgomery County, Maryland was sentenced to prison for lying about her assets on a bankruptcy petition.\u00a0 You think garnishment is bad for your family?\u00a0 Think how your being in prison will affect them.\u00a0 And you&#8217;ll likely come out without a job and have a harder time getting a job, being a convicted liar.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"The_truth_always_comes_out%E2%80%A6\"><\/span>The truth always comes out&#8230;<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Some people think that they just won&#8217;t be caught.\u00a0 I&#8217;m sorry, but that&#8217;s just silly.\u00a0 With as much electronic trails as exist out there, with as easy as it is to look at pay records, tax records, property records, hiding assets in this day and age is almost impossible and simply NOT worth it. One thing this Baltimore County Bankruptcy Lawyer has noticed in his career is that the truth always outs.\u00a0 It&#8217;s far better to shield yourself with the Truth rather than hide behind a Lie.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"1_Dont_hire_a_Baltimore_County_Bankruptcy_attorney_at_all\"><\/span>1.\u00a0 Don&#8217;t hire a Baltimore County Bankruptcy attorney at all.<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>So, you&#8217;ve read some blog posts, found some online resources and you saw an ad for a paralegal service who would prepare your bankruptcy for $395.\u00a0 You don&#8217;t have much in the way of assets, you don&#8217;t need a lawyer.\u00a0 Good luck with that.\u00a0 The problem has gotten so bad with pro se (that means people who represent themselves) bankrutpcy debtors that the Baltimore Bankruptcy Court has set up a Debtor&#8217;s Assistance Panel to try to help some of these people out of the really bad jams they get themselves in.\u00a0 The success of this program is a bit dubious.\u00a0 Many attorneys use it as a forum for self-referring themselves business, some use it to try to learn bankruptcy as they go, while only a small minority of the participants are really in it to help people.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Its_not_as_easy_as_it_looks_even_for_paralegals_who_have_been_doing_this_for_years\"><\/span>It&#8217;s not as easy as it looks, even for paralegals who have been doing this for years<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>The Bankruptcy Code is incredibly complex.\u00a0 Not only does it contain many hundreds of sections, thousands of subsections, but Bankruptcy also implicates the IRS Code, State Laws, the Uniform Commercial Code.\u00a0 Exemption rules add another layer of complexity.\u00a0 Which exemptions are you entitled to?\u00a0 Have you moved to Maryland in the last 2 years?\u00a0 You may have to claim the exemptions of the state you moved from.\u00a0 That state, however may not allow you to claim their exemptions if you are not domiciled there.\u00a0 If that&#8217;s the case, you may have to claim the Federal Exemptions.<\/p>\n<p>Improperly claiming exemptions is one of the mistakes that leads to the most heartache amongst pro se debtors.\u00a0 The trustee and the court are not there to help you through this process.\u00a0 They&#8217;re there to maximize the return for creditors and enforce the letter of the law, respectively.\u00a0 If you make a mistake that allows the trustee to seize your otherwise exempt assets and sell them, the court is not going to point out the mistake you made that allowed them to do it.<\/p>\n<p>In case I was not clear.\u00a0 Bankruptcy is a BIG DEAL.\u00a0 It is a complex area of law.\u00a0 It is not something for novices and it is not something you would do for yourself.\u00a0 If you need help, contact this <a href=\"https:\/\/thegraftonfirm.com\/bankruptcy-chapter-7-chapter-13-foreclosure-repossession\">Baltimore County Bankruptcy Attorney<\/a> for a FREE Consultation.\u00a0 Do not wait.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>There are some really dumb things you can do before filing Bankruptcy.\u00a0 As a Baltimore County Bankruptcy Attorney, I wanted to share with\u00a0 you some of my thoughts on the 7 worst things you could do before filing.\u00a0 These are not necessarily in order of bad idea, because what is bad for you, may not [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":407,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[57,60],"tags":[],"_links":{"self":[{"href":"https:\/\/thegraftonfirm.com\/wp-json\/wp\/v2\/posts\/395"}],"collection":[{"href":"https:\/\/thegraftonfirm.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/thegraftonfirm.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/thegraftonfirm.com\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/thegraftonfirm.com\/wp-json\/wp\/v2\/comments?post=395"}],"version-history":[{"count":2,"href":"https:\/\/thegraftonfirm.com\/wp-json\/wp\/v2\/posts\/395\/revisions"}],"predecessor-version":[{"id":3295,"href":"https:\/\/thegraftonfirm.com\/wp-json\/wp\/v2\/posts\/395\/revisions\/3295"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/thegraftonfirm.com\/wp-json\/wp\/v2\/media\/407"}],"wp:attachment":[{"href":"https:\/\/thegraftonfirm.com\/wp-json\/wp\/v2\/media?parent=395"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/thegraftonfirm.com\/wp-json\/wp\/v2\/categories?post=395"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/thegraftonfirm.com\/wp-json\/wp\/v2\/tags?post=395"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}