Bankruptcy Dos And Don'ts

Simply stated, there are some things that you absolutely must not do if you are planning to file bankruptcy and some things that you can (or should) do that are best completed in a prescribed period of time before you file – and none of these things are necessarily obvious to the average layperson or inexperienced bankruptcy attorney. Failing to act, or taking the wrong action, can have legal consequences that are devastating.

I have worked with many individual debtors and business owners experiencing financial difficulties and helped them make financial decisions that minimized the risk and maximized the benefit of a bankruptcy filing. And, in some instances, I was able to advise them to take steps that made a bankruptcy filing entirely unnecessary.

If you are even exploring the possibility of filing a bankruptcy case, please read the following carefully and always consult with a bankruptcy attorney early on.


  1. Always keep and maintain good financial records (including pay stubs, bank statements, tax returns, monthly statements from creditors, demand letters, and legal documents from creditors). 
  2. Always keep current with payments on secured debts if you wish to keep the property (such as your home and vehicle).
  3. Be serious and careful about all aspects of your financial situation (including making no false promises to any creditors, avoiding making any payments that prefer one creditor over another, and avoiding transferring or concealing property).
  4. Be completely open and honest with your attorney (because we are on your side but can only help if we know all of the facts).
  5. Make yourself easily available to your attorney (because timely communication can make the difference between a good and bad experience with your case).


  1. Fail to list any of your assets or any of your debts. Period. No exceptions.
  2. Repay debts to relatives or close friends. (There are exceptions to this rule, but ONLY after you have discussed the facts fully with your attorney.)
  3. Sell assets for less than fair market value or give them away before filing. This is a bad idea for multiple reasons. First, you are obligated to report transfers you make before bankruptcy, and failure to do so can have serious consequences. Second, the people who received the transfers may be sued and required to pay full value anyway. And, most important, you can be denied a discharge in bankruptcy for transferring assets before filing.
  4. Incur more debt immediately prior to filing. (It’s wrong and the risks far outweigh the rewards.)
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