1. THE CREDIT CARD RUN-UP MISTAKE: Don’t use your credit cards once you have made the decision to file bankruptcy. Consumer debts incurred for luxury goods and services owed to a single creditor in excess of $500.00 within 90 days of filing are presumed to be non-dischargeable and may still have to be repaid after you have filed bankruptcy. Cash advances of more than $750.00 within 70 days of filing are presumed to be non-dischargeable and may be found to be due and owing. Don’t jeopardize your “fresh start” by running up your credit cards.
    
2. THE REPAY A FAMILY MEMBER MISTAKE: With regard to repaying debts, you cannot treat your family member any better than you would an ordinary creditor. In fact, a bankruptcy trustee can reclaim any amount repaid to a family member within one year of filing bankruptcy.
    
3. THE LIQUIDATE YOUR RETIREMENT ACCOUNT MISTAKE: Retirement accounts are generally fully protected. You can eliminate your debt and keep whatever you have in an ERISA qualified account or Individual Retirement Account (IRA) free and clear. Many individuals drain their retirement accounts in a futile attempt to pay down credit card debt.
    
4. THE TRANSFER PROPERTY OUT OF YOUR NAME MISTAKE: A bankruptcy trustee can undo a transfer of property that previously belonged to you. This can occur if the transfer was made within two years of the filing of the bankruptcy with the intent to hinder, delay, or defraud a creditor. In some cases, the bankruptcy trustee can go back FOUR years to undo fraudulent transfers.
    
5. THE LINE OF CREDIT/SECOND MORTGAGE TO PAY DEBT MISTAKE: Don’t take a loan against your real estate in an effort to reduce the equity to consolidate and pay unsecured debt. You can often file bankruptcy and not lose this valuable asset. If you take out a second mortgage to pay credit card debt or medical bills, you may be putting your house at risk.
    
6. THE FAILURE TO APPEAR AT COURT PROCEEDINGS MISTAKE: If there’s a collection case pending against you in state or federal court, don’t assume that you can avoid the court process simply because you’ve decided to file bankruptcy. Until your bankruptcy petition is filed with the bankruptcy court, a collection case continues. Tell your bankruptcy lawyer if a civil summons has been issued against you in attempt to collect a debt owed, and ask your bankruptcy lawyer whether or not you need to appear at the county courthouse or respond to the complaint.
    
7. THE FAILURE TO TELL YOUR ATTORNEY THE TRUTH, THE WHOLE TRUTH, AND NOTHING BUT THE TRUTH MISTAKE: An attorney can only provide advice based upon information provided by the client. Failure to notify your bankruptcy attorney about ALL of your assets can lead to the loss of those assets, denial of your bankruptcy case, fines, imprisonment, or all of the above. You must also tell your bankruptcy attorney about any assets that you have sold or otherwise transferred out of your name during the past four years.

HERE ARE SOME REMINDERS FOR OUR BANKRUPTCY CLIENTS:

1. NO NEW DEBT: DO NOT USE YOUR CREDIT CARDS AND DO NOT INCUR ANY NEW DEBT. DO NOT REFINANCE ANY PROPERTY OR PURCHASE ANY NEW PROPERTY. Doing so may delay the filing of your bankruptcy petition and subject you to potential criminal bankruptcy fraud charges. This restriction does not apply to debit cards that are deducted directly from your checking account. If you have any doubts or questions, please contact our office for advice.
    
2. DO NOT SELL, TRANSFER, BORROW AGAINST, OR OTHERWISE DISPOSE OF ANY PROPERTY: Do not sell, transfer, borrow against or otherwise dispose of any personal or real property. You are in the process of seeking relief under the United State Bankruptcy Code, and your property will be under the bankruptcy court’s jurisdiction. Certain transfers may not be allowed. If you have any doubts or questions, please contact our office.
    
3. LAWSUITS, WAGE GARNISHMENTS, BANK LEVIES, & REPOSSESSIONS: If you have or anticipate receiving a lawsuit, wage garnishment, bank levy, or repossession, you are not protected under the Bankruptcy code until your petition has been filed with the bankruptcy court. Any of these actions can continue against you until you actually file bankruptcy. We have not yet been retained to represent you until your first meeting with us and you sign a fee agreement with our office. Therefore, you should either move quickly to get your bankruptcy filed or be prepared to defend any legal action taken against you.
    
4. TALKING WITH YOUR CREDITORS: Do NOT communicate with your creditors, other than to advise them that you have hired an attorney to file bankruptcy, and to provide our firm name and telephone number once you have retained our firm to represent you. Some creditors may try to obtain more information from you, or will try to talk you out of filing for bankruptcy. If so, please contact our office and we will address the situation. Remember, calls like this are one of the reasons you are discussing your case with us. Other creditors will lie to you and tell you that bankruptcy no longer exists or you don’t qualify for bankruptcy. DON’T BELIEVE THEM. These creditors know that once you file bankruptcy they will have to stop their collection efforts against you, so many abusive bill collectors will lie to you in a last-ditch effort to keep you from filing bankruptcy.
    
5. SECURED LOANS: In a Chapter 7 case, if you want to keep property that is secured by a loan, such as your car or home, you should continue to make the loan payment(s) ON TIME. In a Chapter 13 case, we will be dealing with your missed payments in your Chapter 13 Plan. If you have any questions about whether or not to pay a debt, please feel free to contact our office. Remember, bankruptcy discharges your personal liability. It does not discharge “property liability,” or liens. If there is a valid lien against property, the creditor cannot collect against you personally if that debt has been discharged in bankruptcy, but the creditor can still collect against the property, unless the lien has been avoided. This means that if you do not pay for the property, it can be repossessed or foreclosed upon.
    
6. LIENS AGAINST PROPERTY AND JUDGMENTS: Motions to avoid liens and judgments are sometimes not included in our basic fee agreement, depending on the number and types of liens involved. If you have a lien against your property that may be removed through a Motion to Avoid Lien, or a judgment that could be voided, we recommend you do so. If you wish to hire our office to represent you in filing a motion to avoid a lien or judgment, please contact our office immediately as there are deadlines we must meet. We will discuss your options and the additional fees involved, if any.
    
7. HOUSES, CARS AND TRUCKS: You cannot exclude your house, car, truck or the debts on these properties from your bankruptcy. This does NOT mean that you will automatically lose your car or house. It just means that you have to disclose to the bankruptcy court that you own these assets and how much money you still owe to your secured creditors for these properties, if any. Your secured creditors will receive notice of your bankruptcy filing, but as long as you continue to make your monthly house or vehicle payments ON TIME, you shouldn’t have a problem keeping any property that you want to keep.
    
8. AUTOMATIC DEBITS/PAYMENTS & DEBTS OWED BANKS AND CREDIT UNIONS: If you have any payments or automatic debits taken directly from your bank account and you do not intend to reaffirm that debt, you should immediately stop those payments. You must contact your bank and the creditor directly to do so. You should always follow up immediately in writing to confirm the automatic payment will stop. You should note that many of our clients have had trouble stopping the automatic payments. Therefore, we often recommend that you close your current bank account and open a new account. You should be sure that all checks have cleared before you close the account so that you will not bounce any checks. If you have a bank account at a bank, credit union or financial institution where you owe money on a credit card, loan or other debt, you must close all accounts at that bank, credit union, or financial institution. If you do not, the bank, credit union, or financial institution has the right to freeze your account, and you may lose any money in the account once you file. You should be sure that all checks have cleared before you close the account so that you will not bounce any checks.
    
9. REAFFIRMATION AGREEMENTS: A reaffirmation agreement is an agreement by a Chapter 7 debtor to continue paying a dischargeable debt after the bankruptcy. It is usually used to keep collateral such as a motor vehicle that would otherwise be subject to repossession if you did not sign a reaffirmation agreement. Our firm will negotiate the reaffirmation agreements on your behalf, as long as your monthly budget shows that you can afford to make the monthly payments on the reaffirmed debt after bankruptcy (subject to court approval, of course).
    
10. WITHHOLDING ORDER: If you file a Chapter 13 case, once your Chapter 13 Plan has been confirmed by the Court, you have the option of having your monthly Chapter 13 payment withheld directly from your wages. This is the best method to ensure that your monthly Chapter 13 payment is made on time and eliminates the hassle of having to remember to mail a money order to the Chapter 13 Trustee each month. This is the single best way to ensure the successful completion of your Chapter 13 case. If you are interested in making your Chapter 13 payments via payroll deduction, please contact our office. Keep in mind that even if you choose to make your Chapter 13 payments directly to the Chapter 13 Trustee, if you fall behind in your Chapter 13 payments, the Chapter 13 Trustee can ask the bankruptcy court to issue a wage garnishment order directing your employer to deduct your monthly Chapter 13 payment directly from your wages.
     
11. STATEMENTS/BILLS: As soon as your bankruptcy petition is filed with the bankruptcy court, an automatic stay immediately goes into effect. The automatic stay prohibits a creditor from attempting to collect a debt, which includes sending you monthly statements, collection notices, correspondence, and initiating any verbal communication with you. Therefore, if you are planning to keep a car or house, you MUST continue to make your monthly payments, even if you do not receive a monthly statement/bill. Be sure to write your account number on your check or money order.
     
12. OPEN A FILE: You should start a file to keep all documents related to your bankruptcy. This includes our fee agreement, our correspondence to you, copies of any court documents and the discharge order that is mailed to you at the close of your case. You should retain this file for at least 10 years since your bankruptcy can remain on your credit report for 10 years. It is likely that you will need these documents from time to time in the future, as future lenders will often ask for certain documents to prove that you successfully completed your bankruptcy case.
     
13. CHANGE OF ADDRESS OR TELEPHONE NUMBER(S): If you move or change your telephone number(s) or e-mail address for any reason, you MUST immediately notify our office. It is extremely important that we be able to communicate with you throughout your case. If you have moved or changed your telephone number(s) and have not notified our office, we will be unable to notify you of any important developments in your case.
     
14. OUR DUTIES BEFORE WE ARE RETAINED: Merely by presenting this information to you on our web site, we do not represent you. We will not take any steps to protect your interests, such as filing a petition with the bankruptcy court, unless and until you have signed a retainer agreement hiring us as your lawyer, completed the required credit counseling, and the fees and costs called for have been paid and credited.
     
15. CREDIT COUNSELING: Before your case is filed, you are required to obtain a certificate of completion of a credit counseling course offered by a credit counselor approved by the United States Bankruptcy Administrator for the Western District of North Carolina. While in the vast majority of cases, good credit management skills have absolutely nothing to do with the circumstances requiring the filing of bankruptcy, Congress has nevertheless required the completion of the counseling before a bankruptcy can be filed, and a second financial management course before a discharge can be entered. The counseling normally takes 45–90 minutes, and can be conducted in person, by telephone, or over the Internet. DO NOT TAKE THIS COURSE UNTIL WE TELL YOU TO DO SO. There may be disadvantages to taking the course too early.
     
16. COMPLETING OUR WORKSHEET: The Worksheet that we give to you at your first meeting with our office is not filed with the Court or given to any of your creditors. Rather, the information in each of the questions that you are asked finds a place on the official petition that will be filed with the Court if the decision is made to file. While we fully realize the amount of information requested, it is very important that you answer every question fully and completely, and provide all of the documents requested. Everything that is asked and requested is specifically required by the Bankruptcy Code or required by us to fully and properly review your case and enable us to have the facts necessary to properly advise you. If we need to go over missing or incomplete answers, or discuss missing documents with you, it will delay your case. Please do not put “see attached documents” or leave Worksheet answers blank where you attach documents containing the answer to the question. We really do need you to both provide the information on the Worksheet and provide the requested document. Failure to do so will require additional processing time, and will delay your case.