Declaring bankruptcy necessarily requires you to disclose a large amount of information to the bankruptcy court. As your attorney, I work closely with you to ensure that all your bases are covered. Here are some important areas that you should keep in mind when considering bankruptcy.
1. Your Income
This might seem obvious, but you are required to disclose all sources of income to the bankruptcy court. However, the definition of “income” for bankruptcy purposes is much wider than you might imagine. Is someone renting a room in your house? That’s income. What about public benefits? These need to be disclosed as well. Does a relative regularly contribute funds to help you with household expenses? Yup, that’s income too!
2. Your Assets
This is another area that sometimes gets people in trouble. A classic example of missing an asset is when you give a vehicle to a family member or friend without transferring legal title. The vehicle will show up as belonging to you, even though in your head you believe it belongs to someone else. If not accounted for properly, the vehicle could be lost to the bankruptcy trustee.
3. Recent Credit Use
As you might be able to guess, running up your credit cards or taking large cash advances just prior to declaring bankruptcy can have serious consequences. If you had an emergency and had no choice but to use some of your credit right before filing your case, make sure you tell your attorney. There are strategies for dealing with this situation, but only if your attorney knows about your recent credit use.
4. Gifts or Transfers to Family Members
The bankruptcy court has the power to nullify certain gifts or transfers made to family members prior to your bankruptcy. I can help you determine whether any gifts or transfers would be problematic. But disclosing your gifts after filing your bankruptcy case will be too late.
5. Prior Bankruptcies
The bankruptcy code contains several complex rules to determine whether you are eligible to receive a bankruptcy discharge. If you have filed any type of bankruptcy in the previous 8 years, you need to discuss with your attorney whether you would be eligible for a bankruptcy discharge. This is true even if your prior bankruptcy was successful or not. The timing of your prior bankruptcies also determines whether the “automatic stay” will be in effect during your new bankruptcy.
There are many more areas that you need to discuss with your attorney prior to starting your bankruptcy. These are just a few areas that need special attention. If you have any questions about Chapter 7 or Chapter 13 bankruptcy in Sacramento, please call me at (916) 333-2222.