When is the Best Time of Year to File Bankruptcy?
A common question for people in debt is when they should file for Chapter 7 bankruptcy. Often, filing for bankruptcy cannot wait for a specific time of year, as it often comes after a major, surprising life event such as unexpected medical bills. There are, however, a few ways you can time your bankruptcy to put you in the best position possible.
The timing of your bankruptcy is largely up to when you decided you had to file. This usually occurs when you have run out of options for repaying debt. When the bills begin to pile up and you face the threat of wage garnishment, bank account freezes or shut-off notices, you are likely to seriously consider Chapter 7 bankruptcy as an option.
The first quarter of the year tends to be a popular time for people to file for bankruptcy. People who choose to file at this time often use their tax refund to pay the legal and court fees necessary to move forward.
Another popular time for bankruptcy filing is the end of the month, as it could reduce the overall amount of paperwork you need to do. As of 2005, anyone who chooses to file for bankruptcy must provide 60 days worth of pay stubs and undergo a “means test” to confirm eligibility for Chapter 7. By filing at the end of the month rather than the beginning, you have one less month’s worth of income information to disclose.
Finally, if you are facing a possible foreclosure because you have fallen behind on mortgage payments, filing for bankruptcy before the first Tuesday of the month could be beneficial. Most mortgage companies file their foreclosure proceedings on that day.
It’s important to keep in mind that your specific debt situation may place certain restrictions on you. For personal advice on when and how to file for bankruptcy, call the knowledgeable Chicago attorneys with DebtStoppers at 312-913-0630 or contact us online.