When it comes to filing for bankruptcy, honesty is the best policy.
It’s fair if you don’t want a lot of people to know you’ve filed for bankruptcy. The thing is, though, filing for bankruptcy informs people to some extent. You’ll have to be prepared to share about your financial situation, and while it may not be shared with those whom you are acquainted with, you’ll at least be telling a court, its personnel, your lawyers, and creditors. From there you can choose to tell those you’re closest to, but that is completely up to you.
Because you’ll be informing these people about your finances, you may be tempted to tell a white lie or leave some details out in order to make your situation sound better. In the case of bankruptcy, though, your best bet is to always tell the truth. Complete transparency is a part of remedying the problem — not to mention, a lie could be interpreted as fraudulent. Besides, withholding or altering information to save face, there are other things that can be interpreted as fraud in a bankruptcy case, no matter the intentions of the action. Avoid the following and you won’t face the consequences of fraud, which is a federal offense.
Avoid New Debt
Clearly, you shouldn’t be increasing your debt, but it doesn’t mean it hasn’t happened before in a case. If you file for bankruptcy and open a new credit card, take out a loan, or make some unusual and unnecessary purchases, it can be stated that you did this without the intention to pay it back — fraud. When you run up this debt, it won’t be covered by the bankruptcy case; you will still have to pay this portion back in full.
Avoid Large Transactions Out of Fear
Pay bills, but other than that, don’t make unnecessary transactions. Those filing for bankruptcy may incorrectly assume it’s better to transfer money to family members in order to maintain their assets. They may also be tempted to transfer titles or remove themselves from businesses they own. All of the above is considered fraudulent.
Atwood & McVay
The Law office of Atwood & McVay in Nashville, TN can help when you find yourself in a financial situation and in need of a bankruptcy lawyer. Reach out to us today.