Timing of Your Bankruptcy

: Reese Baker & Associates

  Filed under: Filing bankruptcy

If you are at the immediate risk of losing your home either to foreclosure or eviction, your car about to be repossessed, or your utility shut off, you may want to consider filing an emergency bankruptcy. You can submit your bankruptcy petition with just a few minutes of preparation. 

Automatic Stay

When you file your paperwork with the court, all collection attempts, including legal actions taken against you, must stop immediately. This gives you time to work out a plan for how you will pay your arrears and get caught up on your debt or eliminate all qualifying debt in bankruptcy. 

Delayed Filing

If you are not in immediate danger of losing your home or property, waiting to file bankruptcy may be a good option for you. If you know of a hefty bill heading your way soon, such as a medical bill or balloon payment, if you wait until those bills occur, you will be able to include them in your bankruptcy papers. Debts incurred after the bankruptcy filing are not included to be discharged in bankruptcy. It would be best if you waited until your debts have peaked until you file for bankruptcy. 

Another reason to delay filing if you can, is if you were recently was laid off, or you make more money at certain times of the year. Your income is averaged for the prior six months to file. If you wait until only the lesser of the income is included, you will have a better chance of passing the means test. 

If you know you are planning on filing bankruptcy in a month or two, do not go out and run up your credit cards in anticipation the debt will be eliminated. If the trustee suspects fraud, those debts will not be included in the discharge. Medical bills and other essential bills that turn up at the last minute are rarely challenged. 

If you would like to know the best time to file bankruptcy, contact a Rio Grande bankruptcy attorney to discuss how you can get a fresh financial start.