There are some common mistakes to avoid if you file for bankruptcy. According to 11 U.S. Code § 548, a debtor is not allowed to transfer assets. It is important to know that bankruptcy courts will look back eight years to review all transactions made. You must disclose all assets because withholding assets is considered fraudulent and will cause a dismissal of the case.
11 U.S. Code§ 547 provides that a debtor must avoid paying creditors 90 days before filing for bankruptcy. A preferential payment occurs when the debtor pays one creditor more than $600 in the 90 day period prior to filing. The trustee has the ability to sue to retrieve preferential payments to creditors
Finally, it is important to also avoid making large credit card purchases but some necessary purchases may be legal fees, clothes, and food. Debt owed to one creditor for over $500 in luxury goods during the 90 day period prior to filing is non-dischargeable through bankruptcy.