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7 things not to do if you file for bankruptcy

You've been considering bankruptcy for a few months and now you're ready to go through with it. You want that fresh start. You know there's no other realistic way you're likely to eliminate your debt.

If so, here are seven things you should not do:

  1. Fail to list assets that you want to keep. For instance, people often neglect to list a car or truck.
  2. Lie about your assets just to qualify. Be honest. Qualifying through a fabrication is bankruptcy fraud.
  3. Ignore side jobs. List all of the work you do. Just because you think of it as a weekend side job doesn't mean it's not income.
  4. Transfer assets to hide them. Don't "give" a car to a friend, for instance, while planning to have him or her "give" it back after you file.
  5. Pay your family members. This can look like you're just making up debt to hide and protect assets. Even if the debt is real, you're giving your family preferential treatment over other lenders.
  6. Try to keep a credit card. Some people don't list one card because they want to keep it open. Typically, the companies find out when the filing goes through and shut down the account anyway.
  7. Leave out dependents. Anyone claimed in the filing also needs to report income as part of the household. For instance, perhaps you have a high school-aged son or daughter with a part-time job. That income counts if he or she is claimed on the filing.

The key is to do your research, really understand your legal options, and be honest. It pays to know exactly what steps to take and what information to provide well in advance.

Source: Bankrate, "12 bankruptcy don’ts for 2012," Justin Harelik, accessed Dec. 22, 2017

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