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The latest financial controversy for Toni Braxton are accusations of bankruptcy fraud, alleging that she gave her estranged husband more than $50,000 to avoid paying creditors. (She’s also trending this morning on Twitter for her Behind the Music episode. Did you see it? We have to check that out.)

This could actually happen to anyone if they don’t know the rules or they try to do a runaround the laws. If you are filing, check the bankruptcy laws in your state. But first, assess whether or not it is time for you to declare bankruptcy. According to bankruptcy lawyer Bruce Weiner of Brooklyn-based Rosenberg, Musso & Weiner, LLP , bankruptcy is an option when “the amount of credit card debt is approaching annual income; you have had a drop or loss of income and are thinking of tapping into IRA or 401(k) to pay credit cards; or you stop answering phone because of collection calls.”

New York-based attorney Daniel Gershburg, agrees, adding that “one of the first signs that bankruptcy may be necessary is that you don’t have enough money to pay your credit card minimums. And once you begin to consistently transfer balances from one card to pay for the other, it’s time to file.”

Here’s how to file:

  • Go to a counselor: Attend a credit counseling course. “The course takes approximately 90 minutes and you learn about credit and budgeting,” says Gershburg.
  • Do the paperwork: “Fill out petition and schedules, preferably with an attorney who understands exemptions (what you can keep when filing), all the income tests and rules, and will ask the right questions about transfers or payments to relatives. [He/she] also will understand which debts will be discharged,” says Weiner.
  • Be organized: “File petitions, schedules, counseling certificates, and 60 days of pay stubs with court,” Weiner tells Madame Noire.
  • Follow up: “After trustee assigned to case, mail all papers to trustee together with last tax return,” Weiner explains.
  • Take a 341 Meeting a.k.a. the Meeting of the Creditors: About three weeks after you file for bankruptcy, you should meet with a trustee to go over the bankruptcy estate and other financial data, including the amount you’ve kept in your checking account, inheritances and other info, Gershburg explained to us.
  • Class in session: You will be required to go to another credit counseling class to get your discharge papers, which will be sent about 60 days after, Gershberg said. Keep your bankruptcy lawyer on hand.

If Braxton did transfer some of her money into her husband’s bank account, it’s something that could have been remedied by a bankruptcy trustee, Weiner points out. Federal bankruptcy law gives you two years to undo this action, and most states will give you six years.

“What this means is that if you transfer an asset to anyone for less than fair consideration at a time when you are in debt, the trustee will sue the transferee to avoid the transfer and bring the asset into the bankruptcy so he or she can sell it,” he says. “Another thing that gets people in trouble is repayment of loans to relatives within one year of filing. A trustee can recover that money as a preferential payment.”

If in doubt, check with an attorney. “Your relatives are no different, under bankruptcy laws, than Visa or American Express,” says Gershburg.  “Giving your relatives assets prior to bankruptcy means that the other creditors can’t get their own debts paid. It can either be classified as preferential payments and/or a fraudulent transfer. While, to you, paying your mother maybe more important than paying Discover, doing so can risk your entire bankruptcy case.”

He recommends that you always speak with an attorney before giving mom what you owe her.

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