What Not To Do Before Bankruptcy

Friday, May 10, 2019 - 23:23


While most of our potential clients ask about what happens when they file bankruptcy, and what they need to do when they’re filing, many don't ask what NOT to do. The things you shouldn’t do before filing are just as important as what comes afterwards.

In fact, there are certain things you could do before bankruptcy that could cause major complications.

As we always say, the most important thing to do when considering bankruptcy is to meet with a Licensed Insolvency Trustee. The advice and guidance you’ll receive are vital to avoiding bumps in the road during your case.

So, for anyone out there who’s considering bankruptcy and hasn’t talked to Licensed Insolvency Trustee yet, here are four important things you should avoid doing before you file for bankruptcy:

  1. Don’t max our your credit cards (or get new ones)
    This seems like common sense, but you’d be surprised at how many people rush out and run up thousands of dollars of additional debt once they know they’re going to file for bankruptcy. Actually, this is fraud, plain and simple. It’s highly likely that any large charges that occur right before your bankruptcy will result in objections from creditors. If your creditors see enough large charges, they will likely claim that you committed fraud – and that’s definitely a road you don’t want to head down.
  2. Don’t pay off certain creditors
    Don’t make the mistake of choosing a few creditors to pay off before your bankruptcy. There is no need to do this. When filing bankruptcy, most creditors are included. If you are worried about a creditor, as your Licensed Insolvency Trustee. 
  3. Don’t ignore debt collection attempts
    Sure, the constant calls and letters can be incredibly annoying and stressful, but you shouldn’t flat out ignore the collection attempts. Filing for bankruptcy will stop those collection attempts immediately – but in the meantime, when the creditors call, let them know that you are working on a solution. 
  4. Don’t transfer assets to friends or family
    Some people think that selling assets to get cash is better than liquidation – but that’s fraud. Others think that transferring property to friends or family members is a better way to protect the property from liquidation. Guess what? That’s fraud too.

Latest Posts

Are you still receiving statements from creditors?

After filing bankruptcy, you should no longer receive statements from creditors. But, in some instances, you may still receive some statements. Don’t worry. If you’ve filed bankruptcy or make a consumer proposal, there is no need to worry about the statements.

August 9, 2019

Bankruptcy, Collection Agencies

Why do I need credit counselling?

After filing bankruptcy, you are expected to attend two mandatory credit counselling sessions, required under the Bankruptcy Insolvency Act, to aid in your financial rebuilding process.

August 5, 2019

Credit Counselling