Anyone who needs to seek Chapter 13 bankruptcy protection can't afford to have their case dismissed and lose out on debt relief due to accusations of bankruptcy fraud. But what can you do to ensure that the court doesn't see your expenses as fraudulent? Here are a few key things to do.

1. Question Everything

The bankruptcy court doesn't expect you to avoid spending any money at all — nor even to stop using credit cards if you must. But it does expect you to only spend the minimum necessary as you approach bankruptcy. Are you doing that? The more you cut out the fluff right now, the more the trustee will see that you are spending in good faith. 

2. Keep Receipts

Make a habit of keeping your receipts as you approach bankruptcy. Write down what the items were used for if it's not immediately obvious. This is evidence that you are using revolving credit responsibly and that you are making all attempts to follow the rules. 

3. Avoid Taking Cash

Few things get the attention of a bankruptcy trustee like large amounts of cash taken out of credit cards or bank accounts just before filing. That's because it's one of the more common ways people defraud the bankruptcy system. If you need to spend on a card, try to leave a paper trail rather than take out cash to spend elsewhere. 

4. Play Devil's Advocate

You may know that a particular purchase or expense is reasonable, but consider it from the perspective of someone whose job is to look for fraud. Perhaps, for instance, you paid for a vacation months ago. Prepaid expenses don't affect what's available to pay creditors, but the trustee doesn't know the details. Recognize that this looks questionable and plan ahead to explain it. 

5. Consult an Attorney

A qualified bankruptcy lawyer will help you avoid anything that can harm your Chapter 13 case. Consult with them before you conduct any large transactions or do something that could look suspicious to an outside observer. For example, they can help you decide between taking that prepaid vacation or writing off the amount already paid in order to avoid new costs. 

Where to Start

Could any of your current or recent spending look frivolous or fraudulent to a bankruptcy trustee? If you think so, start by meeting with a Chapter 13 bankruptcy attorney in your state today. With their guidance, you'll have a successful case and exit with the debt discharge you deserve.   

Make an appointment with an attorney for more info.