Bankruptcy – How Soon Should I File?
Okay, you’ve done your research, weighed the options, maybe even consulted with a Chicago bankruptcy attorney and you think that filing for bankruptcy in probably the best way to solve the financial problems you’ve been faced with. So the question now becomes: “when should I file?” There a several considerations that are important in deciding whether to file right away, or to wait a little.
Now of course, if you live in Cook County and are considering Chapter 7 or Chapter 13 bankruptcy in Chicago, then I would certainly appreciate the opportunity to represent you. But all self-interest aside, planning the timing of the petition is one of many important reasons to retain a good bankruptcy lawyer rather than doing it yourself. A good Chicago bankruptcy attorney will take the time to determine if sooner is better, or later.
Often times, “right away” is the correct answer. If you’re trying to keep your car from being repossessed, or avoid being evicted from your apartment, right away might not be soon enough! But there are many circumstances in which waiting is the best thing to do.
For example, if you recently used a credit card for “luxury goods and services” totaling over $550, and those purchases are within 90 day of filing the petition, then the presumption is that those debts were fraudulently incurred. If you took a cash advance of more than $825 within 70 days, the same presumption is raised. Creditors can challenge the discharge of these debts. But, if you plan to file your bankruptcy petition after 90 days since that big credit card purchase or 70 days since that cash advance, then creditor challenges are less likely.
Another good reason to wait is if you are expecting more debt. If you know you need unavoidable surgery and you don’t have insurance to cover it, it may be best to wait until after you get the bills. This certainly doesn’t mean you can run up your debt with no intent to pay though. Shopping sprees and vacations will not be dischargeable, but necessities like medical bills and groceries aren’t usually challenged.
A big reason to wait is if you owe income taxes. Income taxes may be discharged in bankruptcy if they meet several conditions. They must have been due three or more years ago, the tax returns in question must have been filed more than two years ago, and the taxes must have been assessed more that 240 days ago. If you owe back taxes, but it hasn’t been quite long enough since the occurrence of any of these three events, then you might want to wait it out.
There are more possible reasons that you might consider waiting. If you have questions, feel free to comment on the post. I try to always respond. You can also contact me here. I’m happy to help any way I can.
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