Here’s What You Shouldn’t Do Before Filing for Bankruptcy in Alabama

Steele, AL–If you’ve fallen deep into debt and can’t seem to find a way out, bankruptcy may be a suitable solution to get you back on track. But there are a few things you should know before you begin the process, including how to prepare for it. In this article, we’ll share with you the top things you won’t want to do if you’re serious about filing for bankruptcy in Alabama.

Planning on filing for bankruptcy in Alabama? Here’s what you shouldn’t do.

Ignore your income tax returns.

Even though you may be in a financial bind, it’s important to keep up with your taxes. In fact, if you neglected to file your taxes for some time, it could result in your bankruptcy case being dismissed.

According to the Internal Revenue Service (IRS), you must “file all required tax returns for tax periods ending within four years of your bankruptcy filing” when filing for Chapter 13 bankruptcy protection(1).

If you fail to file your returns and/or pay current taxes owed, your bankruptcy case may be thrown out.

Go on a spending spree.

Bankruptcy is meant to help get you out of debt, and therefore, shouldn’t be used as an excuse to max out your credit cards or spend the little cash you do have left. Although most credit card debt generally qualifies for discharge, if the trustee finds that you spent frivolously just before filing for bankruptcy, it could harm your chances of getting your petition approved.

If anything, it’s best not to spend too much before filing for bankruptcy, unless it is on essential items.

Transfer the rights to property or money to someone else.

During the bankruptcy process, you’ll be required to disclose all of the assets you possess ownership of. Some of these assets may be subject to liquidation so that the proceeds can be used to pay down some of your debt. Should you try to hide certain assets by transferring them to a relative or a partner, it may serve as a red flag to the court and potentially ruin your chances of getting your bankruptcy petition approved.

Need help preparing for bankruptcy? A Steele, Alabama bankruptcy lawyer can help.

There are plenty of other things you’ll want to avoid doing in the weeks leading up to you filing your bankruptcy petition, and a bankruptcy lawyer in Steele, AL can help identify what these are. If you’d like to get information on the bankruptcy process that is specific to your current situation or find out if now is a good time to file, the legal experts at Hill, Gossett, Kemp & Hufford, P.C. can help.

You can contact Hill, Gossett, Kemp & Hufford, P.C. at any of their office locations listed down below to schedule an initial consultation.

Have questions about this article or a legal concern? Call 800-672-3103.

Disclaimer: No representation is made that quality of legal services provided is greater than the quality of legal services provided by other attorneys.

Hill, Gossett, Kemp & Hufford, P.C. can be reached at:

Moody Office

2603 Moody Parkway, Suite 200

Moody, Alabama 35004

Phone: (205) 640-2000

Website: www.hwhlawgroup.com

Leeds Office

7900 Parkway Drive

Leeds, AL 35094

Phone: (205) 699-5500

Springville Office

6441 U.S. Highway 11