If you feel like you’re drowning financially with no hope in sight, then bankruptcy may be the solution, but what are the rules? The process is complex and overwhelming for some, which is why you hire an attorney to do most of the legwork. You can save time and money, however; by avoiding some common errors when getting ready to file.

Do: Be Open with Your Lawyer About Your Debt

This is the best way to avoid flags that might slow down the process or cause a problem in some other way. You are paying your lawyer to represent you in court, but that’s not possible when you hide things.

Don’t: Run Up Charges Right Before Filing

It may seem like free money, but the creditors do check to see when debts are incurred. If you decide to use your credit card after making the decision to file bankruptcy, you are creating a debt that you have no intention of paying back. Creditors are within their rights to challenge that debt and you may end up paying that money anyway. bankruptcy

Do: Get Credit Counseling

This is a legal requirement for bankruptcy, so the sooner you sign up the better. A credit counselor can also help you focus your budget to manage your basic expenses first and then make some payments if possible. There may be a wait for an appointment, so go ahead and get that going even if you are not sure about filing.

Don’t: Transfer Property

This is a very common error for those looking to declare bankruptcy, yet keep expensive assets out of the hands of creditors. A transfer of property is different than selling it. Transferring means you signed over the title without receiving something of equivalent value in return. If you do this within four years of filing, the bankruptcy trustee may void the transfer.

Do: Continue to Pay on Assets You Hope to Keep

If you are going to keep your house or car, then you need to continue making payments and stay current. You also need to keep your insurance up for these items.

Don’t: Repay Loans to Friends or Relatives

This is known as a “preference” payment and not something the bankruptcy court will allow. The court trustee will attempt to recover any repayments made within a year of your filing. Wait until after your discharge to pay back “friendly” loans.

Filing bankruptcy is a new beginning for individuals and families that find themselves buried in debt. It is a difficult decision to make, but once you are there, following the rules gets you the maximum legal benefit.