Pitfalls To Avoid In Bankruptcy

In our experience, almost no one is happy at the prospect of having to file bankruptcy. In an effort to delay the inevitable, many of our clients who find themselves badly in debt resort to drastic measures. We understand the desperation that can lead to serious mistakes.

One of the more common bankruptcy pitfalls is cashing in a 401K, IRA or other retirement account. If you are thinking that this may offer a solution to your overwhelming debt, think again. Before you mortgage your future security to pay today’s credit card debts, contact our office in Manhattan today for a free consultation with a respected bankruptcy and debt relief lawyer.

Protect Your Retirement Funds in Bankruptcy

At the Law Office of David B. Shaev, we can help you get out from under crushing debt without cashing in your future security. Many of our client did not realize that we could help protect the money they had set aside in qualified retirement plans throughout the bankruptcy process.

If you need rapid relief from serious debt and creditor harassment and you want to protect your security by retaining your retirement savings in a bankruptcy, contact us today to schedule a consultation with Manhattan bankruptcy attorney David B. Shaev.

Avoid Debt Management

Many people turn to debt management companies to help them get out from under overwhelming consumer debt. These companies devise a debt management plan with you and your creditors to settle your debts according to an established payment schedule. Unfortunately, some of these businesses will defraud you by collecting your money, claiming they will pay your debts, and then pay nothing to your creditors, leaving you in a worsened financial position.

If you plan on working with a debt management company to create a plan to pay your creditors, you should understand how to protect yourself. There are companies out there that will deceive you and make your financial situation worse. When working with a debt management company, make sure that your creditor agrees to the proposed payment schedule. You should also work with an experienced attorney to review your monthly statements to ensure that the debt management company is fulfilling its obligations to you.

Avoid Fraudelent Asset Transfers

It may seem tempting to transfer your assets to another person in order to prevent a bankruptcy trustee from reaching them. This is a mistake, because there are a number of laws that prohibit certain types of asset transfers. A transfer may be considered fraudulent if a person actually intended to defraud a creditor, or in exchange for the transfer, a person received less than a reasonable equivalent value and now is unable to pay debts. A transfer may also be seen as fraudulent if an asset was transferred to another creditor to pay off a past debt at a time when that creditor should have known that person was going through bankruptcy.

There are defenses against allegations of fraudulent asset transfers made by creditors. It is important to speak to an experienced bankruptcy attorney to understand how to defend yourself against such accusations. Some of the defenses that may apply to your situation include that you acted in good faith when making the transfer, or that the transfer was conducted in the ordinary course of business.

Watch Out for Credit Repair Scams

We are proud of our position at the forefront of the fight to protect consumers in New York and nationwide from predatory and deceptive business practices on the part of credit card companies, lending banks, mortgage companies and so-called credit repair services.