Yes, I know he's the godfather to your children, but the law prohibits you from treating family better than your other creditors. In fact, a bankruptcy trustee can reclaim (go after) any amount repaid to a family member within one year of filing bankruptcy. [c1]
2. The credit card run up mistake
Running up your cards once you decide to file...Charges for luxury goods and services owed to a single creditor, totaling to more than $500 within 90 days of filing, are usally not covered under a bankruptcy and you will have to pay them. Ditto on cash advances totaling more than $750 for all creditors within70 days of filing. Don't jeopardize your fresh start by running up your credit cards.
3. Using retirement $$$ to pay debts
You worked hard to save in that 401k don't drain their retirement accounts in a futile attempt to pay down credit card debt! Retirement accounts are generally protected (you get to keep them) when you file bankruptcy.
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