Bankruptcy Do’s & Don’ts

At The Bensamochan Law Firm, we work closely with clients to help them understand how to prepare for Chapter 7 or Chapter 13 bankruptcy and avoid common mistakes that can affect eligibility or outcomes. Making informed decisions early can help protect your assets, avoid unnecessary complications, and position you for a smoother process.

What You Should Do

As you consider bankruptcy, keep the following in mind:

Address financial issues early
Delaying action often limits available options. Speaking with a bankruptcy attorney early can help you understand your rights and plan appropriately.
Be transparent about your finances
Full disclosure of income, debts, assets, and recent financial activity is essential. Providing complete and accurate information allows your attorney to develop the most effective strategy for your situation.
Stay current on secured debts you wish to keep
If you plan to retain your home or vehicle, continuing payments can help protect those assets. Falling behind may increase the risk of foreclosure or repossession.

What You Should Avoid

Certain actions can complicate or jeopardize a bankruptcy case. Avoid the following:

Withdrawing funds from retirement accounts
Many retirement accounts are protected in bankruptcy. Early withdrawals may create tax penalties and expose funds that would otherwise remain exempt.
Making large purchases or taking cash advances before filing
Significant credit card use shortly before filing may be scrutinized and, in some cases, deemed non-dischargeable.
Transferring or hiding assets
Moving property out of your name or attempting to conceal assets can lead to serious legal consequences. There are lawful ways to protect property—an attorney can advise you properly.
Using credit cards to pay other credit cards
Shifting balances between accounts is often a sign of financial distress and can complicate your case.
Assuming bankruptcy eliminates all debts
Some obligations, such as certain taxes, student loans, and domestic support payments, are generally not dischargeable.

Bankruptcy is a powerful legal tool when used correctly, but it requires careful planning and informed decision-making. Attorney Eric Bensamochan provides clear, practical guidance to help clients avoid common pitfalls and move through the process with confidence.

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Contact The Bensamochan Law Firm to discuss your situation and learn how to prepare for bankruptcy the right way. Se habla español.

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Regardless of your situation, know that Eric Bensamochan can help! Call The Bensamochan Firm at 818-574-5740 to learn more today.

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