Bankruptcy Planning

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When filing for bankruptcy, it is a good idea to plan for how it will affect your finances and spending. Now that you have consulted with an experienced bankruptcy attorney and decided that bankruptcy is the right option for you, you may consider what you can do to maximize your benefits from bankruptcy.

At the San Diego and Riverside County, California, law firm of Chang & Diamond, APC, our experienced attorneys are there to guide you through your options regarding bankruptcy and debt relief so that you can make a fresh start − as many of our former clients have done.

Contact the San Diego Bankruptcy Planning Attorneys at Chang & Diamond, APC, today for a FREE Initial Consultation. We can discuss your individual case and plan the next steps in your bankruptcy process.

Planning Ahead With Bankruptcy

Make sure that you seek credit counseling, even if you have been approved for Chapter 7 or Chapter 13 bankruptcy, since you are required to complete approved credit counseling. You may also want to take the time to reconsider the timing of bankruptcy if your income has recently changed. You may benefit more or less depending on whether you wait to file or go forward with it now.

If you are filing for Chapter 7 bankruptcy, plan ahead by looking at which debts are going to be discharged and which ones are not. You do not want to be putting money toward dischargeable debts. Instead, put more of your money toward nondischargeable debts. This way you are not wasting your resources.

Here are some other things to consider when planning for bankruptcy:

  • Reorganize location of assets if they are in a credit institution you owe money to; otherwise when you file for bankruptcy, that institution may be able to take your money and apply it toward your debt.
  • Evaluate your exemptions: maximize exemptions by considering converting nonexempt assets into exempt assets.
  • Stop using credit cards: charges exceeding $750 within 70 days prior to filing are presumed fraudulent.
  • Report all significant financial transactions: you want to avoid accusations of fraud; this includes property transfers.

Legally Protecting Assets Before Bankruptcy Filing

To legally protect your assets before a bankruptcy filing, it’s crucial to understand the bankruptcy code and exemptions allowed under bankruptcy law. Utilizing exempt property provisions is key; certain assets like retirement accounts, homestead property, and personal belongings may be protected under state or federal exemptions.

It’s essential to avoid transferring assets out of your name to evade creditors, as this can be deemed fraudulent by the bankruptcy court. Engaging in proper planning with a bankruptcy attorney can help identify which assets are considered exempt and non-exempt in your bankruptcy case.

Additionally, establishing a debt repayment plan for unsecured debt, like medical bills or personal loans, through required credit counseling could also protect your assets by demonstrating good faith efforts to manage debt.

Avoiding rash financial decisions and consulting with a credit counselor or bankruptcy trustee can provide guidance on managing your financial affairs and assets strategically before filing for bankruptcy.

Common Mistakes to Avoid in Bankruptcy Planning

When planning for bankruptcy, common mistakes include incurring new debt, inaccurately reporting assets or income, and failing to attend credit counseling sessions. Incurring new debt shortly before filing bankruptcy, especially if it’s for non-essential items, can lead to objections by creditors or the United States trustee, potentially leading to accusations of bankruptcy fraud.

Misrepresenting your financial situation, either by underreporting income or hiding assets, can result in the dismissal of your bankruptcy case by the bankruptcy judge or severe penalties. Additionally, the bankruptcy process requires debtors to undergo credit counseling before filing a bankruptcy petition; skipping this step can delay or invalidate your bankruptcy filing.

Proper planning involves full transparency about your financial affairs, adhering to bankruptcy laws, and following the legal process meticulously to ensure a fresh financial start without complications.

Bankruptcy Planning with Chang & Diamond, APC

To plan for your bankruptcy, call Chang & Diamond, APC. Contact us today to schedule your free initial consultation with an experienced bankruptcy lawyer.

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