Raiding your 401(k). Don’t think of retirement savings as “now” money. It’s moneyyou’ve got to save for later. “Some people use their IRAs, and wind up in bankruptcy,anyway.” Even if you end up having to use it post bankruptcy, it will go a lot further towards survival of your family after bankruptcy; when you are…
1. Don’t leave out bank, checking, savings, brokerage, credit union accounts.
2. Don’t use your credit cards.
3. Don’t take credit cards cash advances.
4. Don’t use convenience checks.
5. Don’t make balance transfers.
6. Don’t pay debts to family.
7. Don’t pay debts to friends.
8. Don’t tell a creditor you intend to pay.
9. Don’t leave assets of any kind off of your paperwork.
10. Don’t fail to tell your attorney about your small business, sole proprietorship, partnership, LLC, LLP, LC, Corporation or hobby.
11. Don’t give of gift property to anyone.
12. Don’t transfer assets to anyone unless it is a genuine sale for fair value.
13. Don’t cash out retirement plans or 401k’s.
14. Don’t gamble.
15. Don’t hide assets or debts.
16. Don’t forget timeshares or co owned property.
17. Don’t omit unfiled legal claims you have.
18. Don’t forget stock options, profit sharing plans, or pension rights.
19. Don’t take out payday loans.
20. Don’t put your money in your children’s bank account.
21. Don’t omit or ‘save” a credit card for after your bankruptcy.
22. Don’t fail to list debt to family or other “insiders”.
23. Don’t write bad checks.
24. Don’t give creditors postdated checks.
25. Don’t borrow money without talking to your attorney first
26. Don’t forget to tell your attorney about liens or unpaid judgments on your home.
27. Don’t make major financial decisions without talking to your attorney.
28. Don’t misrepresent facts to your attorney.
29. Don’t bank where you owe money.
30. Don’t take your name off a title to any asset.
31. Don’t assume you understand bankruptcy fully, ask your bankruptcy lawyer.
1. Confirm a chapter 11 or chapter 13 plan under §1123 & §1129(a) although both are ride with too many complications to address here.
2. Redeem it. Special rules apply to certain vehicles but essentially the debtor is entitled to buy the property from the estate at a value determined by the court, Say a debtor owes $29,000 on his dually/diesel pickup he uses personally that he bought more than 910 days prior to filing. The court determines the value is only $17,500. The debtor can borrow the money from an outside source and keep the truck by paying the creditor $17,500. The balance is treated as an unsecured loan. Where is
a debtor going to borrow $17,500? There are lenders out there who makes those kinds of loans.
3. Reaffirm the debt, either at the present contract rate and terms (if the debtor cannot do better); or some mutually agreed modification of it.
4. Claim it as exempt. Since secured debt owed on property diminishes the equity the owner has, there is often little that needs to be exempted. Moreover, many debtors are so far upside down in the mortgages on their homes, that they are electing to surrender them, thereby availing themselves larger allowances.
The 11th Circuit and the homeowners in the cases, argue that since Primary and “Dewsnup” are unaffected by stripping of totally unsecured secondary mortgages, the same logic should apply to Chapter 7 debtors that allows Chapter 13 debtors to strip secondary mortgages. In reading the transcript from oral argument, it seems clear, that even a divided court was having difficulty finding Bank of America’s argument compelling.