Bankruptcy: Post-Filing Do's and Don'ts
If I have already filed for Chapter 7 bankruptcy protection, there are some important Do’s and Don’ts which come into play during the pendency of your case.
DO continue making payments on vehicles which you intend to keep.
Creditors secured by a car or truck can usually repossess the vehicle without notice to you anytime you are in default in your payments. It will ordinarily take longer for other creditors (including those secured by other property) to act on a debt that is in default.
Note:If your car has been repossessed but not sold yet, you may be able to get it back if you file Chapter 13 immediately.
DON’T sell, transfer or give away any assets you have without contacting me first.
The filing of your bankruptcy petition creates an estate which temporarily comes under the control of the Trustee who is assigned to your particular case. The Trustee’s job is to liquidate (sell and reduce to cash) any property that is not exempt under State or Federal law. Typically, in a Chapter 7 filing, there are rarely assets that are liquidated. Nevertheless, DO NOT sell, give away, transfer title, settle any personal injury lawsuits or otherwise dispose of any of your property while your Chapter 7 Bankruptcy is pending.
DON’T be concerned if a few creditors still attempt to contact you or send you bills or collection letters after filing.
99% of your creditors will stop harassing phone calls or threatening letters shortly after the filing of your petition. By operation of law, immediately upon the filing of your bankruptcy petition, the “Automatic Stay” goes into effect. This stay prevents all of your creditors from taking any action to attempt to collect a debt. This includes calling you by phone at home or at work, sending collection letters, starting or continuing lawsuits against you, garnishing wages, repossessing vehicles or other security and foreclosing on your home. Occasionally, a creditor will still call or send a letter after the Notice of Commencement of Bankruptcy case has gone out in the mail. If this happens to you, simply send a copy of this Notice to the creditor who is still contacting you or tell them to call my office to verify the filing of your case.
DON’T pay $600 or more back to relatives or business associates who have lent you money.
Payment of a total of $600 or more to an “insider” (which includes relatives and business associates) within one year before you file bankruptcy is a preference. The trustee may recover preferences from the person that was paid and divide the money between all of your creditors. (Payment of $600 or more to any other creditor within 90 days before the case is filed is also a preference.)
DON’T put property you own into someone else’s name to avoid it being taken by creditors or the trustee.
That kind of transfer is a fraud on creditors and can result in your discharge being denied. In addition, the trustee can take the property from the person to whom it was transferred.0