If you are planning to file a chapter 7 bankruptcy in next few months, extreme caution is in order when it comes to financial issues. No matter what led to your need to file for bankruptcy, if you aren't careful, you could end up being barred from getting the debt relief that you desperately need. Read on to ensure that your actions don't get you in trouble with the bankruptcy courts.

1. Spending Freely

If just knowing that you are about to have all of your credit-card debt forgiven has you burning up the plastic, you might need to think twice. Your creditors are all too well aware of this tendency to use credit cards right up to limit and then declare bankruptcy, and rules have been put into place to prevent that from happening. You cannot charge more than $650.00 in the 90-day period prior to filing without drawing a creditor's objection at your creditor's meeting. If you are able to show that you only used the card for needed items, such as a car repair or to replace a broken appliance, you may be off the hook. Just don't try to justify a luxury vacation or a designer bag.

2. Getting Cash

Just as with the use of credit cards, getting a cash advance from a credit card could raise suspicions as well. You may only take $925.00 total from all credit cards in the 70-day period leading up to your chapter 7 filing.

3. Favoring Certain Creditors

Your debt burden is meant to be distributed fairly, so if you are seen to be unfairly paying off certain debts and letting others go unpaid, you may be risking the unwanted attention of the bankruptcy trustee. Why would someone pay only certain creditors? Often, it is the personal loans from friends and family that provoke this behavior. Take care not to pay more than $600.00 to any one creditor in the 90-day period leading up to the bankruptcy filing. It should be noted that just making the minimum payments on your debts is not being targeted here; it's the excess amount of payments you need to watch out for. To make things more fair, the bankruptcy trustee can perform a "take back" of the funds given to a favored creditor.

4. Transferring Property

The sad side effect of a bankruptcy filing is the potential to lose property, such as a home or vehicle. If you are found to have sold or given away property right before your filing, you could be charged with fraud. Selling property for below-market prices is also not allowed.

To learn more about the effect of your financial actions prior to bankruptcy, consult a bankruptcy attorney such as Donald T Tesch, PS.