3 Things you should avoid if you are considering bankruptcy
- Swiping your credit card
One of the first things you should do if you find yourself in financial trouble is cease the use of your credit cards. No online spending, cash advances, or shopping. Just remember, if you know you will be filing bankruptcy and you use a credit card, you are committing fraud.
- Cashing out your retirement
Debt collectors have a variety of ways they can collect owed money. These include garnishing your wages or attaching a lien to your property. Creditors, however, cannot touch your retirement fund, as it is protected by certain sections of the tax code. While cashing out your retirement may seem like a quick fix for financial trouble, as soon as your retirement money enters your personal bank account, it is no longer protected from garnishments.
- Transferring assets out of your name
People often believe that if they transfer assets out of their name, the asset will become safe from bankruptcy. Not only is this false, but it also may be illegal. Worse yet, transferring assets can be seen as fraudulent in the eyes of the court, even if you had no intention of hiding your assets.