Don't Do these things.

If you are thinking about filing a chapter 7 or chapter 13 bankruptcy in Oregon it is a good idea to not do any of these things until you talk with your lawyer.  It looks like there are a lot of “don’ts” here, but talking to your lawyer prior to taking any action regarding these matters can avoid a lot of headaches for you  later.  Do not hesitate to ask questions.  You are paying a fee for one reason--advice.   

Don’t sell, give away or transfer ownership of anything prior to filing your bankruptcy case without first discussing it with your lawyer. 

Doing so could allow a bankruptcy trustee to go after the property

Don’t use credit cards or incur more debt.

One you have decided to file a bankruptcy you should stop using credit cards or borrowing money.  If you continue to incur new debt prior to filing, it could prompt an objection from the creditor and you may be forced to repay the money. 

Don’t pay money to family members or friends.

Money paid to family members and friends within one year prior to your bankruptcy can be recovered by the bankruptcy trustee. If the amount paid is small, the bankruptcy trustee probably will not care, but it is wise to be cautious.

Don’t pay back family or friends by transferring property.

Transferring ownership of property to pay a debt owed to someone could allow the bankruptcy trustee to get the property back as a preference payment.

Don’t leave assets off your bankruptcy forms, including lawsuits or claims you may have.

The only way to exempt an asset and protect it from the bankruptcy trustee is to list it and exempt in under the applicable Oregon exemption law, federal exemption law, or other state exemption laws if you have not lived in Oregon long enough.  Intentionally leaving out an asset is a federal crime.  The much better choice is to candidly talk about all of your property with your lawyer, through proper pre-bankruptcy planning much can be done to protect assets. If this is not possible perhaps a chapter 13 bankruptcy could solve the problem.  Also, if you do not list your claim or lawsuit you may never be able to bring that suit in the future!

Don’t take money out of retirement plans, IRA’s or 401K’s. 

If you do, the money may no longer be protected. Talk with your lawyer about this if you really need to withdraw some money.

Don’t file bankruptcy if you are expecting a large tax refund.

Unless the refund consists of the Earned Income Credit a bankruptcy trustee in Oregon can take most if not all of your refund.  The better choice is to postpone your bankruptcy if you can, receive the refund, then talk with your lawyer about where to spend the money that will not get you in trouble.  Also, if Oregon exemptions do not apply in your case, the EIC may not be exempt. 

Don’t put your money into someone else’s bank account or put your name on someone else’s account.

A lot of people put their name on their elderly parent’s account “just in case.”  This is usually a bad idea.  If you want to be able to help mom or dad in case of disability or illness, a power of attorney is probably a better choice.

Don’t get married or move in with someone, especially if that person has a high income. 

Under the new bankruptcy law your spouse’s income may get counted and in some cases so does income from domestic partners and maybe even roommates or renters.  Discuss your plans with your lawyer before making any changes to living arrangements.

If you receive a refund after you file your bankruptcy don’t spend it. 

If you do the trustee can sue you to collect the money and the court could revoke your discharge.

Don’t fail to be fully candid with your lawyer. 

Your lawyer cannot give you good advice if he doesn’t know all the facts