Talking About Privacy Law

If you have already filed bankruptcy, there are some things you shouldn't do during the proceedings, including shop for the holidays. Bankruptcy court will examine your spending habits, as well as your finances to see it can dismiss your debt or make you pay it back. Until bankruptcy court makes a decision, you typically don't have to make any payments to your creditors. You may think that it's okay to buy expensive holiday gifts because of this financial break, but it's not. If the court finds out about your purchases, the bankruptcy judge can deny the dismissal of your debt. In fact, the court can make you repay all of your creditors. Before you shop until you drop, you may want to keep the following information in mind.

How Does Bankruptcy Court Find Out About Your Holiday Spending?

Even if you use a bankruptcy attorney to file for debt relief, the bankruptcy court will assign you a trustee to oversee your case. A bankruptcy trustee isn't an attorney or judge, nor does he or she take sides in your case. The trustee examines your case to see if you have the ability to repay your creditors.

In order to see if you can or cannot repay your debt, the trustee will usually examine your bank accounts. Once your attorney files your case with bankruptcy court, you give the trustee legal permission to look into your finances. The trustee may contact your bank and request information about your checking and savings accounts, as well as any purchases you made during and after you filed bankruptcy. If the trustee finds any new or large expenses, such as purchases made to a department store or online retailer, he or she can report this to the court.

What Happens If You Spend Money You Say You Don't Have?

Because of your holiday spending, your trustee may look deeper into your financial standing to see if you have any hidden funds or assets, such as:

• An offshore bank account
• A vacation home in another state and in someone else's name
• A future inheritance
• A spouse or parent who pays your bills
• A freelance career or other form of self-employment

The trustee and bankruptcy judge presiding over your case may consider you as being dishonest about your financial situation, even if you're completely truthful about your income and assets. It's critical that you don't hide funds of any amount from your trustee, including money you plan to spend on gifts. In addition, your bankruptcy attorney must receive complete honesty from you in order to help you find debt relief. If you wish to buy gifts for your loved ones, you may want to wait until the court dismisses your case, and after you have a chance to get back on your feet financially.

What Can You Do Instead Of Buying Expensive Gifts?

Although you may want to give your loved ones what they wish for during the holidays, you should avoid spending money. However, you can give them heart-felt gifts in many other ways, including:

• Preparing and cooking a delicious holiday meal for everyone
• Spending time with your loved ones - sometimes, spending time with your family and friends can be the best gift of all
• Offering assistance with holiday preparations, such as putting up seasonal lights and decorations for your loved ones - they may appreciate the extra help during the busy holidays

If you really feel bad about not buying gifts, you may want to explain your situation to your family and friends. Your loved ones can offer emotional, personal and financial support in your time of need. These actions can help you get through your bankruptcy filing better than doing it alone.

Once you file for financial relief from your creditors, you must report everything that can affect your case. If you have questions about what you should and shouldn't do during your bankruptcy filing, contact your attorney for professional legal advice.