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Things to Avoid When Filing Bankruptcy

Get the Most Out of Your Bankruptcy in Lafayette, IN

When people think bankruptcy, they think about dealing with your debts, and getting a handle on the negative balances.  A financial “fresh start” means more than getting your debt paid off, but also protecting any essential assets. To maximize this crucial benefit of bankruptcy, you should not sell or borrow against your protected assets before filing a bankruptcy case.

In my daily work as a bankruptcy attorney, I constantly meet with new clients who have sold, spent, or borrowed against assets as a desperate attempt to keep creditors at bay. Some even do so thinking they would lose that asset regardless, so why not use it. The reality is that it is much harder to get a stable financial footing when there is nothing to stand on. Please reach out to someone with solid bankruptcy advice before making desperate decisions.


Protect your Assets when Filing Bankruptcy

  • With straight bankruptcy through Chapter 7 you can protect all exempt assets. A very high percentage of people who file under Chapter 7 keep everything they own.
  • If you have assets worth more than the applicable exempt amounts, Chapter 13 adjustment of debts can almost always protect those non-exempt assets that wouldn’t be protected under Chapter 7.
  • If you have assets that are not exempt, with a knowledgeable bankruptcy attorney and a smart pre-bankruptcy plan those assets will be better protected once your bankruptcy case is filed.


Get Legal Advice BEFORE Wasting Your Assets

Bankruptcy cannot protect what you’ve already spent agChapter 7 chapter 13 criminal law Brad Woolley Law Offices Lafayette INainst your debt. When people sell, spend, or borrow against their assets before filing bankruptcy, more often than not, those assets would have been protected had they filed bankruptcy before spending them.

If you are considering spending, selling or borrowing against any of your assets, think of this:  Do you know for sure whether that asset is one that could be protected in bankruptcy?

These kinds of decisions can have serious long-term effects, so they shouldn’t be made without legal advice. Consider someone in their late-50s cashing in a substantial amount of their 401(k) retirement plan to keep paying creditors. What they don’t know is those creditors could be written off in bankruptcy. That decision would likely significantly harm the quality of their retirement lifetime, with no tangible benefit to show for it. That decision would lead to anything but a “fresh start”.

For understandable reasons, people tend to get legal advice only when they are in serious trouble, and after they have made and acted on these kinds of harmful decisions. You can avoid this by contacting us at (765) 420-8900 and talking to a bankruptcy attorney. You can make a clean start by getting the proper advice on how to retain your valuable assets before they are gone.