Filing for bankruptcy is a significant financial decision that can help you regain control over your debts, but the actions you take before filing can have a major impact on your case. Many people make avoidable mistakes that lead to delays, lost property, or even case dismissal. If you’re considering bankruptcy in Louisiana, here are several things you should not do before you file.

1. Don’t Transfer or Hide Assets

One of the biggest mistakes people make is moving money or property out of their name to protect it from creditors. This can look like fraud to the bankruptcy court and may lead to your case being dismissed—or even criminal charges. Be completely transparent about your assets.

2. Don’t Rack Up New Debt

Avoid using credit cards or taking out new loans right before filing. If you make large purchases or take cash advances within 90 days of filing, the court may consider that fraudulent and require you to repay those debts even after bankruptcy.

3. Don’t Repay Friends or Family First

While it might feel right to pay back loved ones before other creditors, the court sees this as “preferential treatment.” The trustee could demand those funds back to distribute evenly among all creditors.

4. Don’t Ignore Legal or Financial Advice

Each bankruptcy case is unique, and Louisiana bankruptcy laws have specific exemptions and requirements. Consulting with a qualified bankruptcy attorney before filing ensures you make the right choices and avoid costly mistakes.

5. Don’t Drain Retirement Accounts

Retirement funds are usually protected in bankruptcy. Withdrawing money from these accounts not only reduces your financial security but may also create tax liabilities.

6. Don’t Delay Seeking Help

Waiting too long to act can make your financial situation worse. Early legal guidance can help you prepare and plan a smoother path toward financial recovery.

At De Leo Law Firm, LLC, we can provide legal assistance to the Mandeville public. Our team can help you understand your options and avoid mistakes that could jeopardize your bankruptcy case.