Attorney David M. Offen Illustrates Pre-Bankruptcy Filing Mistakes

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Bankruptcy attorney David M. Offen, of The Law Offices of David M. Offen, posts new blog on what not to do before filing bankruptcy.

David M. Offen, The Law Offices of David M. Offen

If you have made the decision to file for bankruptcy, you are likely eager to move forward as soon as possible; you know that bankruptcy provides a financial fresh start, and you are in a hurry to put your financial problems behind you.

Attorney David M. Offen, founder of The Law Offices of David M. Offen, which focuses on bankruptcy law, in a March 27, 2016, blog, educates people on what not to do before filing bankruptcy.

“If you have made the decision to file for bankruptcy, you are likely eager to move forward as soon as possible; you know that bankruptcy provides a financial fresh start, and you are in a hurry to put your financial problems behind you,” said Offen. “However, it is sometimes best to wait to file. You should be aware of what not to do before filing bankruptcy.”

Moving assets, writes Offen in the blog, such as moving funds to someone else’s bank account, transferring vehicle titles, removing your name from bank accounts or business ventures, and deeding real estate to another person, are just a few examples of asset moves that are looked upon unfavorably by the courts. “These could result in a denial of bankruptcy discharge,” writes Offen.

Furthermore, Offen suggests avoiding preferential transfers altogether. A preferential transfer is defined as a payment to a particular creditor that is more than the creditor would have received under a bankruptcy. It is acceptable to pay the regular monthly payments, but not payment in full or any payments out of the ordinary on older credit card debts. Offen also stresses not incurring new debt.

“Courts look back 70 to 90 days to determine if you racked up new debt without intending to pay it back,” writes Offen in the blog. “If possible, avoid taking out new loans or using your credit cards during the three months preceding your bankruptcy filing.”

People filing for bankruptcy should also refrain from depleting protected accounts, as certain accounts, such as a 401(k) and most retirement accounts, are exempt in bankruptcy. They should not be drained to pay creditors that would otherwise be discharged in a bankruptcy. Offen further cautions against moving any funds in a bank account during the lookback period that are considered yours, even if they actually belong to someone else, as moving them around, such as transferring them to the person they actually belong to, could look like you are fraudulently moving assets.

“Timing your bankruptcy is of critical importance,” said Offen. “As soon as you decide to file, stop performing any of the above actions immediately, and discuss with your bankruptcy attorney if you should file now or wait to file until an appropriate length of time has passed.”

About David M. Offen, The Law Offices of David M. Offen
David M. Offen is licensed to practice in Pennsylvania and New Jersey. He is a member of the Eastern District of Pennsylvania Bankruptcy Conference and the National Association of Consumer Bankruptcy Attorneys. He has over 20 years of experience and has helped more than 9,500 individuals and families go through the bankruptcy process. For more information or a free consultation, please call (215) 625-9600, or visit http://www.getfreeofbills.com. The law office is located at 601 Walnut Street, Suite 160 West, Philadelphia, PA 19106.

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