Interviewer: What are some of the mistakes that people make that prevents them from being allowed to file bankruptcy or harms the actual filing?
Avoid Transferring Ownership of Assets to Have Them Excluded from the Bankruptcy Filing
Tanya: People think that they’re going to be smart and they’re going to transfer property before a bankruptcy to somebody else or they are not going to show any income. They will arrange only to get paid in cash. They may buy something on a credit card and think that they can discharge it shortly afterward.
Bankruptcy Trustees Are Acquainted with Debtors Trying to Hide or Transfer Assets
The truth is you go in front of a trustee for your bankruptcy. That’s the person assigned to your case. Rarely do you go in front of a judge. The trustees know people do this. Very few bankruptcy debtors are so smart that they can do any of these dishonest actions very well. Frankly, the behavior is somewhat expected and it is discovered very quickly. You usually can’t get away with it and you could be punished criminally.
Do Not Drain Assets That Are Not Dischargeable through Bankruptcy
Interviewer: What do people try to do, even unintentionally?
Tanya: I have clients who have gambling problems or spending problems. People have pathological spending problems and they will say they have no money and they can’t pay their bills. Then I have to give them a list of items that I need from them and without fail, within the last three months they cashed out a retirement account for $50,000 and they gambled it away. That’s going to be a problem. Not to say that gambling debts or not dischargeable, but certain items are not.
In This Case, Your Best Advice Is Legal Advice: Your Bankruptcy Attorney Can Advise You of the Many Ways You Can Legitimately Protect your Assets in Advance of Filing
In bankruptcy, you’re much better off if you go to your lawyer and you give the lawyer your true facts and circumstances and there are many things that the lawyer can do in advance of the bankruptcy. An experienced bankruptcy attorney can advise the clients of totally legitimate ways to protect many of their assets.
Ways to Protect Your Assets Pre-Bankruptcy
If a person has a lot of debt but then they get a sum of money, if they went into the bankruptcy, it would be taken to pay the creditors. If that person, for example, has significant personal needs like dental work – I have people who come that and say, “I’m not going to get dental work done, I’m not going to get new tires for my car, I have a broken refrigerator,” some really basic needs that are falling apart on them and then they mention they have $10,000, if I simply declare that $10,000 that money might be taken if it’s over and above the exemptions.
It Is Better to Put Money You Have toward Necessities While You in in Pre-Bankruptcy
Whereas if they used it to get tires so that they weren’t driving unsafely or they used it to get a new refrigerator so their children would have fresh food or they used it for necessary dental work, there’s no problem with that because those are basic needs that can be paid for with that money, rather than giving it to pay the credit cards because it’s a priority.
Interviewer: Do most people even know that they can do pre-bankruptcy planning or they just muddle through it on their own most of the time?
To Fully Protect Your Assets, It Is Advisable to Discuss Your Basic Needs Pre-Bankruptcy with Your Attorney
Tanya: I think some people do try to work this out on their own and some people don’t. It depends. I ask a lot of questions to try and figure out what they have or haven’t done. Every office is different. The bankruptcy application is a large form. It’s a 40-page form and you can simply have clients fill it out and then take some data and just process it for them.
Your Bankruptcy Application Is Not an Area Where You Want to Cut Corners: Attorney Helfand Has the Experience to Know What the Bankruptcy Trustees Are Looking for and Guides Her Clients throughout the Process for the Best Outcome
I prefer take the extra time with my clients. This is because I know what the investigators are looking for and what the trustees are looking for. I like my cases to go very smoothly. I don’t want my clients to have problems. I really don’t. By taking the time to thoroughly research their situations, when there’s something that doesn’t make sense or isn’t going to go well for them, we try and fix it. It is far better to have a problem resolved well before you file the bankruptcy. Going into a bankruptcy, knowing some aspect is going to be a problem only allows it to be preemptively resolved.
Forestalling Problems: Good Advance Preparation Leads to Good Outcomes in Any Bankruptcy Filing
Interviewer: That is one factor that differentiates you from the large law firms who handle many bankruptcies a day?
Tanya: Yes, I think so. It’s the responsibility of a good bankruptcy lawyer to know these answers. Sometimes you just don’t get them and you can’t help that, but I think it is essential in the process to be very thorough and to have all your documentation in advance. This is because you know from the experience what questions are going to be asked when you go in. You better be prepared in advance to substantiate any answers and to again not make the trustee suspicious, but to have a comprehensive and credible answer for any inquiries.