Many people use their income tax returns to catch up on the bills. Generally that is a good idea, however, if you plan on filing for Bankruptcy, paying friends or family before filing can lead to problems. Even other creditors, such as health care providers to whom more than $600 is paid within 90 days of filing can end up loosing that money to the US Trustee. As a rule you can not pay any one creditor more than $600 within 90 days of filing, or any insider, like a business associate, or family member, more than $600 in the year prior to filing. So while you may think its a good idea to take care of friends, family and other providers, you are not doing them, or yourself any favors.
