Bankruptcy can provide meaningful relief from debt that has become unmanageable, but the decisions a debtor makes before and during a bankruptcy case carry real consequences. Five mistakes come up repeatedly: filing under the wrong chapter, moving property before filing, paying favored creditors first, submitting incomplete financial disclosures, and missing required steps and deadlines. Any one of them can delay the case, draw scrutiny from the trustee, or put the discharge at risk.
At Andersen Beede Weisenmiller, our Nevada bankruptcy attorneys work with individuals and businesses in Las Vegas and throughout Nevada to identify these issues early, while there is still time to address them.
Why Preparation Matters in a Bankruptcy Case
Bankruptcy is governed by detailed federal rules that leave little room for improvisation. A transaction that seemed harmless months before filing may become a central issue once the trustee reviews the debtor's records, and an overlooked requirement can stall the case entirely. Working with an experienced Nevada bankruptcy lawyer before filing allows those concerns to be identified and addressed before they become more difficult and more expensive to resolve.
Mistake #1: Filing Under a Chapter That Does Not Fit Your Situation
Chapter 7, Chapter 11, and Chapter 13 serve different purposes, and the right choice depends on the debtor's income, property, and the type of debt involved. An individual whose debts are primarily consumer debts must also account for the means test under 11 U.S.C. § 707(b), which can limit access to Chapter 7 for higher-income filers. Businesses face a different set of considerations. A corporation or LLC does not receive a discharge in Chapter 7, because the discharge is available only to a debtor who is an individual. 11 U.S.C. § 727(a)(1). A business that intends to keep operating will usually need to consider Chapter 11 instead.
Mistake #2: Moving Property Before You File
Before filing, some people sell a vehicle to a relative, transfer title to a family member, or otherwise rearrange their assets. Those transactions do not disappear when the case is filed. The trustee may avoid transfers made within two years before filing with "actual intent to hinder, delay, or defraud" a creditor, and certain transfers made for less than reasonably equivalent value. 11 U.S.C. § 548(a)(1). The trustee may also use Nevada's Uniform Fraudulent Transfer Act, which generally reaches transfers made up to four years before the claim is brought. 11 U.S.C. § 544(b)(1); NRS 112.230(1).
The consequences can extend beyond recovery of the property. A debtor who transfers or conceals property within one year before filing, with intent to hinder, delay, or defraud a creditor, may be denied a discharge altogether. 11 U.S.C. § 727(a)(2)(A).
Mistake #3: Favoring Certain Creditors Before Filing
Repaying a relative's loan before filing may seem like the honorable thing to do. In bankruptcy, however, a payment to a creditor on an old debt can be treated as a preference. The trustee may generally recover payments made to ordinary creditors within 90 days before filing, and payments made to insiders within one year before filing. 11 U.S.C. § 547(b)(4). For an individual debtor, "insiders" include relatives. 11 U.S.C. § 101(31)(A)(i). When a preference is recovered, the money comes back from the person who received it, which often means a family member must return funds that were repaid in good faith.
Mistake #4: Submitting Incomplete or Inaccurate Financial Disclosures
The bankruptcy schedules and statement of financial affairs must give a complete picture of the debtor's income, property, real estate, debts, and recent transactions. Items that are easy to overlook, such as side income, an expected inheritance, or a vehicle titled in someone else's name, still need to be disclosed. An honest error can usually be corrected by amendment. A debtor who "knowingly and fraudulently, in or in connection with the case . . . made a false oath or account," however, may be denied a discharge. 11 U.S.C. § 727(a)(4)(A).
Mistake #5: Missing Required Steps and Deadlines
Several requirements apply before and after the petition is filed.
Credit counseling before filing. An individual generally may not be a debtor unless he or she received a briefing from an approved nonprofit budget and credit counseling agency "during the 180-day period ending on the date of filing of the petition." 11 U.S.C. § 109(h)(1). Only limited exceptions apply.
The 341 meeting. In a Chapter 7 case, the meeting of creditors is held no fewer than 21 days and no more than 40 days after the case is filed. Fed. R. Bankr. P. 2003(a). "The debtor shall appear and submit to examination under oath" at that meeting. 11 U.S.C. § 343.
The financial management course. An individual debtor must complete a course in personal financial management after filing to receive a discharge. 11 U.S.C. § 727(a)(11). In a Chapter 7 case, the certificate of completion is due within 60 days after the first date set for the 341 meeting. Fed. R. Bankr. P. 1007(c)(4)(A).
Missing any of these steps can lead to dismissal of the case or closure of the case without a discharge.
Addressing Problems Before You File
Each of these mistakes is far easier to prevent than to correct once the case is underway. ABW Firm's attorneys help individuals and businesses evaluate the appropriate bankruptcy chapter, review pre-filing transactions for potential issues, prepare complete financial disclosures, and track the requirements and deadlines that apply after filing.
Planning before a bankruptcy is every bit as important as the actions your counsel takes during a bankruptcy. The benefits of filing may not be available to you if you act without the advice of an experienced bankruptcy attorney.
Mark Weisenmiller, Esq.
Partner
Andersen Beede Weisenmiller
Bankruptcy Attorney
Frequently Asked Questions
What happens if I make a mistake on my bankruptcy paperwork?
Many errors can be corrected by filing amended schedules. Knowingly and fraudulently omitting material information, however, can result in denial of the discharge under 11 U.S.C. § 727(a)(4).
Can the bankruptcy trustee take back money I already paid to a family member?
In some cases, yes. Relatives of an individual debtor are insiders, and the trustee may generally recover preferential payments made to insiders within one year before filing.
How far back can a bankruptcy trustee look at property transfers?
Under the Bankruptcy Code, the trustee may challenge fraudulent transfers made within two years before filing. By relying on Nevada's Uniform Fraudulent Transfer Act, the trustee may generally reach transfers made up to four years earlier, and in some circumstances longer.
Do I have to take a class before I can file for bankruptcy in Nevada?
Yes, in most cases. An individual must complete credit counseling with an approved agency within the 180 days before filing. A separate financial management course is generally required after filing in order to receive a discharge.
How can a bankruptcy lawyer help before I file?
A bankruptcy lawyer can review your finances, identify issues with recent transfers or payments, and help determine which chapter fits your circumstances. At ABW Firm, our Nevada bankruptcy attorneys work through these questions with clients before a petition is filed.
Have Questions Before Filing for Bankruptcy?
The decisions made before filing shape what happens once the case begins. If you are considering a Chapter 7 or Chapter 11 filing in Las Vegas or elsewhere in Nevada, ABW Firm can review your options, identify potential problems, and explain the process before you move forward. This post provides general information and is not legal advice for any particular situation.
Contact ABW Firm to discuss your circumstances with a Las Vegas bankruptcy attorney.
This article provides general information about federal bankruptcy law as of October 2026 and is not legal advice. Reading it does not create an attorney-client relationship. Bankruptcy requirements and the consequences of pre-filing decisions depend on the specific facts of each case. The information in this article should not be relied upon for any purpose.
