While you can sell things, it’s advisable to speak with an attorney before doing so. Any transfers prior to filing bankruptcy must be disclosed in the petition, which can raise a red flag. It’s not as big of a deal if you receive fair market value; for example, if you sell your home for fair market value and then file bankruptcy, it will be disclosed in the petition showing the home sold for actual value. Speak with an attorney before selling items for less than value or selling items to family members prior to filing bankruptcy.
We’ve Had to Take On Additional Debt Right Before Filing for Bankruptcy to Support Our Family During the COVID-19 Crisis. Will We Have Trouble Discharging This Debt?
The answer is maybe, maybe not! Personal debt of more than $675 incurred within 90 days of filing could be subject to repayment. The creditor could file an adversary and show that you knew you were having financial difficulty when you charged up your credit cards, only to turn around and file bankruptcy. We will talk to you about the recent charges and work out a plan to help you discharge your debt. The goal is to get you out of debt, not get stuck paying back recent charges.
Should I Pay Back Any Family or Friends I Owe Before Filing for Bankruptcy?
No, definitely not. When you file for bankruptcy, the court looks back over the last four years to see if you transferred any property or gave away money to your family. You can’t prioritize your family over your other creditors, so do not pay family members before you consult an attorney.
When Must I Complete the Pre-Bankruptcy Credit Counseling Course? If I Don’t Get This Done Right Away, Does It Hold Up My Bankruptcy Case?
Pre-bankruptcy credit counseling must be done prior to filing. The certificate that you receive when you have completed the credit counseling must be filed along with the bankruptcy petition. The credit counseling certificate is good for six months, so if you do the course now and don’t file bankruptcy within 6 months from the date you completed the course, you’ll have to take the course again. We cannot file your case without you having completed the bankruptcy counseling within six months.
How Long After Filing for Bankruptcy Will the Creditors Stop Calling or Harassing Me?
Almost immediately. Most loan companies and credit cards are notified electronically, so the calls are likely to stop overnight. Many people say that they check their cellphone to make sure it’s still working because they’ve stopped receiving the harassing calls they were used to getting! Local loan companies that do not receive electronic notification of the bankruptcy, however, could take a little longer if they receive notice by mail. All you do is let us know that they are harassing you, and we’ll give them a call as soon as we file to provide them with the case number. They must cease and desist all collection efforts as soon as you have an assigned case number.
How Does Filing for Bankruptcy Affect My Credit Score?
The effect on your credit score depends on your current credit score. We have some clients who have pretty good credit scores but have reached that tipping point where they can no longer manage their debts. Let’s say their score is 700. When they file for bankruptcy, it’s likely that credit score will drop. In contrast, a client with a credit score of 500 could potentially raise their score after filing for bankruptcy because all of the bad debt that’s been dragging their score down goes to $0.
Will I Have to Pay Income Tax on Debt Discharged in My Bankruptcy?
You do not have to claim discharged debts as income on your tax returns. When debts are cancelled or forgiven outside bankruptcy, the creditors issue what is known as a 1099(c), showing that they cancelled the debt on their end. If you are dealing with the debt in a bankruptcy, you do not have to claim that as income or pay tax on that money.
For more information on Bankruptcy in Georgia, an initial consultation is your next best step. Get the information and legal answers you are seeking by calling (706) 940-0594 today.