How Should I Time My Bankruptcy Filing?

If you are thinking about filing for bankruptcy but have some flexibility in terms of when you actually file, you may have a number of questions about timing your bankruptcy filing, and concerns about how the timing of your bankruptcy filing might impact your ability to have certain debts discharged. In some situations and for some debtors, it might make sense to file for bankruptcy as soon as possible to have the benefits of the automatic stay under the U.S. Bankruptcy Code, while for other debtors, it could make sense to wait a certain amount of time to file if you have relatively recent debts that you are hoping will be eligible for discharge.

If you are looking for more information about timing your consumer bankruptcy filing, you should ask yourself the following questions to get a general idea of how bankruptcy timelines could impact your case. Most importantly, you should seek advice from an Oak Park bankruptcy lawyer who can help.

Have You Recently Earned More Money Than Usual?

If you have taken on additional work in order to attempt to pay off your debt, now might not be the best time to file for Chapter 7 bankruptcy. When you file for Chapter 7 bankruptcy, you will need to pass the “means test,” and the bankruptcy court will look at your earnings from the last six-month period. If you do not typically earn what you have earned in the last six months and you want to be eligible for a liquidation bankruptcy, it could make sense to wait.

Have You Recently Lost Your Job?

If you recently lost your job due to the pandemic or for other reasons and you want to file for Chapter 13 bankruptcy to stop a foreclosure on your home, you will need to be able to show that you have a regular income. You may be ineligible for Chapter 13 bankruptcy if you are unemployed.

Do You Anticipate More Debt That Could be Discharged?

If you are anticipating significantly more debt due to a medical procedure, for example, that you are hoping will be eligible for discharge, you should wait until the debt shows up on your record. Otherwise, the only debts eligible for discharge will be those that you had on the date of your filing.

Are You Expecting a Tax Refund?

If you are expecting a tax refund and you are planning to file for Chapter 7 bankruptcy, it could make sense to use the tax refund to pay for things your family needs once you receive it and to file for bankruptcy afterward. Otherwise, you could be required to turn over the tax refund to the bankruptcy trustee if you receive it after filing for Chapter 7 bankruptcy.

Contact a Bankruptcy Attorney in Oak Park, Illinois

Do you have questions or concerns about the timing of your bankruptcy filing? One of the experienced Oak Park consumer bankruptcy attorneys at our firm can assess your case and help you to understand the benefits and limitations of filing immediately or waiting for a certain amount of time before filing for bankruptcy under Chapter 7 or Chapter 13. Contact the Emerson Law Firm for more information about the services we provide to consumers in and around Oak Park.



See Related Blog Posts:

Can I Purchase or Sell Real Property During a Chapter 13 Bankruptcy Case?

Risk of Consumer Bankruptcy When Federal Benefits End?




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