Follow these guidelines to avoid making some common mistakes when filing bankruptcy:


Do not use credit cards or take cash advances fewer than 90 days before filing. Doing so can create a presumption of fraud.


Do not pay money back to family or friends before filing.  These can be considered preference payments and the Court can take the money back to pay other creditors. Don’t make any large payments (more than about $400) within a year before filing.


Do not incur any new debt once you have seriously considered filing bankruptcy. Debt acquired after you have considered filing bankruptcy will not be dischargeable and you will have to pay it back.


Do not omit any assets from your bankruptcy petition.  Make sure to include everything.  If you list all of your assets on your bankruptcy petition then they can be dealt with properly and may possibly be exempted under the law. Hiding your assets will not allow you to use the exemptions to protect them.


Do not file bankruptcy shortly before receiving a substantial tax refund, inheritance, or insurance settlement. Any such payments received after filing can be collected by the Court and used to pay your creditors.


Do not cash out a 401K or other retirement account prior to filing bankruptcy. These types of accounts are protected and you will not lose them in the bankruptcy.


Do not pay dischargeable debt (credit card, medical, etc.) before non-dischargeable debt such as taxes or student loans. Most types of debt can be discharged, but taxes and student loans will likely have to be paid through the bankruptcy or after you receive your discharge.


Do not write bad checks.  Doing so is illegal and any debt paid with a bad check may be deemed non-dischargeable by the bankruptcy Court.


Do not fail to list family or friends that you owe money to on your petition. If you list all of your debts on the petition, then your family and friends will receive their share if there is any money to be paid to unsecure creditors. The remaining debt will then be discharged, but of course you can still choose to pay them back after the bankruptcy if you like.


Do not file a bankruptcy with a high cash balance in your bank account on the day of the petition. That money will become park of the estate and be used to pay creditors. Instead, withdraw the funds from the account and use it to pay bills with money orders. Do not write any personal checks immediately before filing bankruptcy.


Do not keep a credit card with a balance after you file bankruptcy. That debt can be discharged, as long as you do not reaffirm it after filing. You can let all of your credit cards go and apply for new ones once you get your discharge. Despite the negative impact of a bankruptcy on your credit rating, you will almost certainly be able to get a new credit card once your case is closed.