The Best Times Of The Year To File For Bankruptcy

Law Blog

If you think you should file for bankruptcy, but you are not sure when you should do it, you are not alone. Hesitancy is a common issue seen by many a bankruptcy lawyer. Clients do not know if they should file, or when the best time to file is. Here are some pointers on the best bankruptcy filing times during the year, and why these times are best:

Six Months BEFORE Christmas

If you file for bankruptcy in June, you have a clean financial slate in time for Christmas. That means that your past bills do not haunt our "Christmas present," so to speak. How you manage your money after this Christmas is up to you, but if you spend more conservatively, you may not have a ton of bills in January. Also, it is impossible to get a credit card after filing for bankruptcy and having the bankruptcy discharged, so this Christmas you would have to reign in the spending anyway. That might be a really good thing for a change.

One Month AFTER Christmas

You had tons of debt before Christmas, then afterward you probably have a ton more. This is the ideal time to wipe it all away with bankruptcy and start the year fresh. The credit cards included in the bankruptcy go away, you do not have access to fresh cards to create more problems, and you spend an entire year learning to live within your means. You also learn to plan far in advance for next Christmas, and either buy things throughout the year and tuck them away, or stash cash for the holidays in a Christmas savings account instead.

Before Filing Your Taxes

If you are an outstanding American citizen who wants to pay his/her tax debt, file for bankruptcy before you file your taxes. Any tax debt that you have you will be able to pay because you do not have to pay the rest of your debts. Just be careful about this one, because any tax refund you receive may be court-ordered to pay other debts.

After Filing Your Taxes

Most people find out after filing their taxes that they owe the IRS. This is a major problem because you have all of this other debt and no way to pay it. Filing for bankruptcy after filing your taxes means you can include the IRS debt in your bankruptcy filing. While you may get some or all of your tax debt excused, at the very least you may not have to pay in quite so much. It is certainly worth the effort to find out how much of the tax burden the government is willing to excuse in light of your current situation and your bankruptcy filing.


4 June 2017

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