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What are some financial actions to avoid in Chapter 7 bankruptcy?

On Behalf of | Mar 14, 2024 | Bankruptcy

Individuals who experience prolonged periods of financial strain may wish to carefully evaluate their available options prior to choosing a path for relief. In many scenarios, bankruptcy could be just the path with which to pursue debt relief and protect a person’s financial future, but this can also be a complex process. Individuals in Ohio who are weighing the possibility of seeking relief via Chapter 7 bankruptcy might not even be aware of what actions they should avoid and what types of risks such measures may help prevent. 

Examples of financial actions 

Experts indicate that there may be numerous types of financial actions one should avoid taking upon filing for bankruptcy. Making sudden changes to spending or saving habits may be a common example, as the bankruptcy court might view such actions as acts of bad faith or fraud. Attempting to use funds to pay debts owed to family members or friends may also be ill-advised and the court may even issue an order for the trustee to recover these funds. 

Attempting to transfer ownership of property and assets to another party could also prompt similar results. Continuing to use credit card accounts is another type of financial action that could prove detrimental to one’s situation. The presence of such actions could lead to allegations of fraud or even cause the court to dismiss a bankruptcy case. 

Preparing for the bankruptcy process 

The average person might not always be aware of how the decisions he or she makes could affect the outcome of a bankruptcy case. With so much at stake, those who wish to seek relief via similar paths might choose to retain the services of an attorney for assistance during every stage of this process. An attorney can provide a client in Ohio with insight on every type of action to avoid and assist in preparing to reduce or eliminate his or her debts via Chapter 7 bankruptcy.