Preparing For Bankruptcy: What Not To Do, Part One

Preparing For Bankruptcy: What Not To Do, Part One

The Morrison Law Group strives to achieve complete client satisfaction with the services we provide over the course of a bankruptcy case, as well as the ongoing services that we provide post-bankruptcy. Not all Utah Bankruptcy attorneys can make this statement, but the Morrison Law Group is not like other Utah bankruptcy law firms.

For anyone considering bankruptcy, there are many actions just prior to filing that may harm their bankruptcy case, even if their estimated filing date is several months in the future. It is always a good course of action to consult with a qualified bankruptcy attorney when planning for bankruptcy,

If filing a bankruptcy case is likely, any prospective filer should avoid the following actions. Failure to do so may result in questions and challenges in their bankruptcy case by the trustee and creditors.

*Do not transfer money or property to family members or creditors

Anyone transferring property titled in their name to another will generally have the effect of this transaction overturned by the bankruptcy trustee and court. In extreme cases, they may be accused of making a fraudulent transfer, even if the debtor transferred the property innocently with no malicious intentions.

Prospective filers should avoid depositing funds or moving funds into bank accounts belonging to others. Future debtors should not change the title to any bank accounts or automobiles, which are in their name, into the name of their spouse or child. Debtors should also refrain from any name changes related to eliminating their name as an owner of a business enterprise. It may be a wise course of action to avoid transferring real property in their name to another person, even if it is a legitimate business transaction with real value exchanged between the parties.

Many people transfer funds or property because they fear they will lose it in bankruptcy. However, possessing assets does not inhibit or prevent anyone’s ability to file a bankruptcy case. An experienced bankruptcy attorney can provide advice on effectively protecting assets that any debtor fears losing when filing a Chapter 7 or Chapter 13 bankruptcy case.

Despite the true motive of “doing the right thing,” and paying preferred creditors in full before filing bankruptcy, such transactions, known as preferential transfers, are generally prohibited by federal law in Title 11, the Bankruptcy Code. Prospective debtors may pay your bills in the normal course of business but may not make any payment that satisfies an obligation to a creditor in full.

Theron Morrison has helped 8,000 people file bankruptcy and gain a fresh start. This amount of paperwork may seem overwhelming to some, but the Morrison Law Group can help you streamline and expedite the process of collecting, organizing, and filing it in any Chapter 7 or Chapter 13 bankruptcy case. Call 801.456.9933 today to schedule a FREE consultation. We have locations in Ogden, Logan, Sandy, and St. George to serve the residents of the counties of Weber, Cache, Salt Lake, Utah, Morgan, Davis, Washington, and surrounding areas.

 

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