Things to Do Before Filing Bankruptcy -- Pre-Filing Checklist

Pre-Filing Checklist

Before filing bankruptcy, take these essential steps:

1. Complete credit counseling from a DOJ-approved provider (required within 180 days before filing)
2. Gather all financial documents: Tax returns (last 4 years), 60 days of pay stubs, bank statements, mortgage statements, vehicle titles/values, investment account statements
3. Stop using credit cards: New charges incurred near filing can be challenged as nondischargeable fraud
4. Do NOT transfer property: Transferring assets to family or friends before filing is fraudulent transfer and can be reversed by the trustee
5. Do NOT pay back family loans preferentially: Paying back a relative (insider) within 1 year of filing is a voidable preference under Section 547
6. Do NOT drain retirement accounts: 401(k)s and IRAs are exempt in bankruptcy. Cashing them out to pay debts you could have discharged is the worst thing you can do.
7. File all tax returns: You must be current on all tax filings. Missing returns can delay or prevent discharge.
8. Research your state's exemptions: Know what property is protected before you file.