Many Clients, who want bankruptcy relief, contact our firm at the beginning of the year and indicate that they made it through the holidays and now wish to file either a Chapter 7 bankruptcy or a Chapter 13 bankruptcy. After further consultation, we find that many of the financial actions that the client took during the holidays, either in buying gifts or attempting to liquidate assets, affect their ability to file bankruptcy. A bankruptcy is intended to provide a fresh start to the debtor. However, in order to allow that fresh start for the debtor, the debtor cannot have attempted to prefer certain creditors over other creditors. An example of preferential treatment for certain creditors over others is paying off a family member's loan prior to filing bankruptcy. In Ohio, the bankruptcy Trustee will pursue the money from the family member in order to equally distribute it amongst all creditors in the same class as the family member.
Debtors also cannot utilize credit without intending to repay the creditor; an example of this would be purchasing holiday gifts on credit cards and not making any payments on that credit card and then attempting to discharge that debt for those gifts in the bankruptcy. In Ohio, the bankruptcy Trustees may require that you repay all of that debt through a Chapter 13 bankruptcy. Accordingly, even though you may not file the bankruptcy until the new year, it is wise to meet with a bankruptcy attorney, like those at www.lawrencelawoffice.com, as soon as possible so that you know what information you have to gather for filing the bankruptcy and you can work with your attorney on the best course of action to navigate the months prior to filing the bankruptcy.