Frequently asked questions
How long before filing should I stop using credit cards?
Stop immediately once you know you will file. The safe harbor is at least 90 days for purchases over $725 on a single card (luxury goods) and 70 days for cash advances over $1,000. But the broader fraud analysis under 11 U.S.C. § 523(a)(2)(A) has no fixed time period -- so the longer you wait, the safer you are.
Can I pay my regular bills?
Yes. Paying ordinary, recurring obligations -- mortgage, rent, car payment, utilities, insurance -- is fine. These are not preferential transfers because they are payments in the ordinary course of business. The problem arises when you pay old debts, lump-sum repayments, or one creditor at the expense of others.
Can I sell things before filing?
You can sell property at fair market value. The proceeds become part of your estate, and you must disclose the sale. Do not sell property below value to family or friends -- that is a constructive fraudulent transfer.
Can I give gifts before filing?
No. Gifts within 2 years of filing are treated as fraudulent transfers because you received nothing in exchange. This includes birthday gifts, holiday gifts, or charitable donations of significant value.
Is it OK to transfer money between my own accounts?
Moving money between your own bank accounts is generally fine, but large transfers can look suspicious. The trustee reviews bank statements and will ask about any significant movements. Keep records and be transparent.
Can I take out a new loan before filing?
Taking on new debt when you know you are about to file raises fraud concerns. The lender could argue the debt is nondischargeable under § 523(a)(2) because you had no intention of repaying it.
What if I already made a mistake?
Consult a bankruptcy attorney immediately. Many pre-filing mistakes can be mitigated by delaying the filing date (to push the transaction outside the lookback period), disclosing the transaction fully, or structuring the case to address the issue directly. Hiding the mistake is always worse than disclosing it.