If you are seriously considering filing, some perfectly reasonable-looking decisions can cause real problems later. Almost nobody knows this in advance, and the trustee’s job is to look for exactly these things.
Stop using the cards
Charges made shortly before filing — especially for luxuries or cash advances — can be challenged as debts incurred without intending to repay them. Even innocent spending looks bad on a timeline. If you are heading toward a filing, stop adding to it.
Do not pay back family
This one catches almost everyone, because it feels like the honourable thing to do. Repaying a relative shortly before filing is a preference, and the trustee can require your relative to hand the money back. You will have created a genuinely painful family situation trying to do the right thing. Ask your attorney about timing before you repay anyone.
Do not move property around
Transferring a car into your brother’s name, selling something to a friend for far less than it is worth, taking your name off a deed — all of it can be reversed, and all of it looks like concealment whether you meant it that way or not.
Do not drain retirement
Retirement accounts are generally protected in bankruptcy. Cashing one out to pay debts you were about to discharge is the most expensive avoidable mistake in this whole process. People do it constantly, take the tax hit and the penalty, and file six months later anyway with nothing left.
Do not take out a new loan to pay old debt
Consolidation loans, borrowing against the house, or a payday loan to cover a card — this converts debt that bankruptcy could clear into debt secured against something you want to keep, or into a fresh obligation that survives.
Be careful about a new bank
If you owe money to the same bank that holds your current account, they may be able to take what is in it. Ask an attorney before moving anything, but it is a question worth raising early.
What to do instead
Write down everything you have done in the last year that appears on this list. Then tell your attorney about all of it, plainly, at the first meeting. Almost all of it can be worked around when it is disclosed up front. Almost none of it can be, when the trustee finds it first.