It is not uncommon for people with the best intentions to make bad decisions in an attempt to pay off debts and avoid filing for Bankruptcy. Filing for bankruptcy protection is not something to take lightly, but it is not the end of the world either. Bankruptcy laws have existed since this country was founded. The premise is to allow debtors the opportunity to make a fresh start and remove debt that would last a lifetime. Because a bankruptcy eliminates old debts, you will be in a better position to pay your bills going forward. The elimination of strangling debt will also make you a better risk to creditors. If you are considering filing for bankruptcy protection you owe it to yourself to study your options so you can regain control of your financial health. Speaking with a bankruptcy attorney is the best way to learn if a bankruptcy filing is best for your situation.

In the meantime, you should avoid the following mistakes many people make attempting to avoid bankruptcy:

1. Taking a case advance from credit cards to pay existing debts;

2. Borrowing from retirement benefits, 401K’s or IRA accounts to pay off debts;

3. Refinancing a home to pay off existing credit card debt.

4. Transferring real property out of their name to protect it from creditors;

5. Any actions to pay off secured debt by incurring non-secured debt.

The bankruptcy laws allow you the opportunity to eliminate existing debt and regain control of your finances. The laws are not set up to punish you or leave you with no future. Specific Exemptions exist to protect specific assets such as retirement funds to help you move forward once the bankruptcy is complete. If you find yourself taking or considering any of the above actions, you should consult with a bankruptcy attorney to see if filing for bankruptcy is right for your situation.