Deciding to file for bankruptcy is tough. Despite the well-meaning, encouraging voices telling you it represents a fresh start and wiping the slate clean, to many people if feels like surrender or failure. The holidays can make that feeling even worse, as you contemplate the challenges of gift giving. The best way to approach the situation is less about looking for a single best time than to understand exactly how the various bankruptcy rules will apply to you. Here’s what you need to know about timing your bankruptcy filing.

• No matter what time of year it is, if you are being endlessly hounded by bill collectors or threatened with foreclosure, the time to file would be now. That’s because the moment that you file the courts will impose an automatic stay that stops all collection efforts.
• If you are anticipating being paid a year-end bonus, it may make sense to file for bankruptcy beforehand. That’s because any monies you receive prior to your filing will be calculated into your means test, and may make it more difficult for you to qualify for the type of bankruptcy that allows you to discharge your debts rather than having to pay them off over time.
• If your credit card activity during the holiday season has focused on gifts and luxury items, you will not be able to include those charges in a bankruptcy discharge. That is because any debts incurred within 90 days do not get included unless you can show that they were for necessities.
• If you just lost your job, it may be smart to wait to file for bankruptcy, especially if you got paid severance pay. In calculating your ability to pay off your debts, the bankruptcy court will look at all income received over six months, regardless of whether that income is continuing or not.
• If you are anticipating taking on more debt in the future, you may want to wait to file. That is because your filing will only cover existing debt.

As you can see, there are many elements to be considered when timing your bankruptcy filing. For guidance on the best time to file for your personal priorities, contact our office to set up a time for a consultation. Our experienced attorneys will guide you to the right decision.