If you are seriously considering filing for Chapter 7 bankruptcy, then you will need to take some steps to prepare for it. One thing you may need to do is to learn what things you should avoid before filing. For example, a bankruptcy trustee might look into your finances for the past six months or longer. To properly prepare for it, you might want to avoid doing the following things before filing.

Giving Away or Selling Assets

The bankruptcy court will look at your assets closely and carefully, and they will ask if you got rid of any assets in recent times. If you have, then they might consider this a fraudulent move on your part, and they could dismiss your case. People often get rid of assets before filing for bankruptcy to avoid losing them. However, you should not give away or sell anything you own before filing for Chapter 7 as it could ruin your chances of receiving a discharge from your case.

Charging New Debts

Secondly, if you have credit cards with available balances, then you might feel tempted to go shopping to buy things before filing for bankruptcy. If you do this, then the court will see it, and they might also dismiss your case. Racking up credit card debt before filing is not a smart move as it could jeopardize your chances of completing your case.

Taking Out Loans

You should also avoid taking out new loans. The court might wonder why you are borrowing more money when you cannot pay the current debts that you have. Therefore, you should not buy a new vehicle or house before filing for bankruptcy.

Entering a Lawsuit

You might also want to avoid entering into lawsuits before you file a Chapter 7 case. When you enter a lawsuit and expect to win money from it, the court can take this money if you file for Chapter 7. Therefore, you should wait to take part in lawsuits until after your case ends. When you file your Chapter 7 case, the court will ask if you are involved in a lawsuit right now.

When you want to file for bankruptcy, you will need to plan for it. Part of planning means knowing the things you should avoid and making sure you avoid them. If you have questions about filing, then you should contact a bankruptcy law attorney in your city.