Illinois consumers who might be considering bankruptcy may be interested
in a recent article that discusses issues that a person might need to
consider before they file for bankruptcy. Some of these actions might
draw scrutiny from a bankruptcy trustee who is assigned to the case after
the person files for protections.
Some actions, such as taking out a cash advance, paying off family members
who are also creditors and retitling assets, might be viewed negatively.
A person who seeks cash advances before they file for bankruptcy might
be investigated for fraudulent activity. In many cases, a portion of that
advance must be paid back after the person pursues bankruptcy. Furthermore,
family members who are owed money are the same as other creditors, and
taking steps to pay them back during a bankruptcy may not be allowed.
Finally, if a person attempts to transfer their assets to other parties
in an attempt to shield them from liquidation during a Chapter 7 bankruptcy,
it may have the opposite effect. As an example, a car might be protected
from liquidation if it is paid off, but if that vehicle is transferred
to another person, a
bankruptcy trustee might be able to take possession of it. Typically, there are legal ways
to shield assets that do not involve retitling them.
In order to plan a bankruptcy to avoid
unnecessary seizure and liquidation of assets, it might be beneficial to work with an attorney who is familiar with
how relevant state and federal laws apply to the process. That attorney
may be able to explain available exemptions to a client in an effort to
minimize the possible negative impact of the action.