When Is the Right Time to File Bankruptcy?
Timing can mean everything in life. Bankruptcy is no exception. When is the right time to file bankruptcy? A few basic tips about the right time to file bankruptcy can be very helpful.
1. File Before Collection Becomes Too Aggressive
If you were considering Chapter 7 or Chapter 13 bankruptcy, it is better to file your case early. If you wait too long, aggressive collection may follow. If you’re considering chapter 7, a garnishment can make it much more difficult. The garnishment will take a substantial portion of your paycheck, taking away finds you could otherwise use to pay for your bankruptcy fees.
2. File After You Have Received and Spent Your Tax Refund
In Indiana, it may be wise to file bankruptcy after you have received and spend your tax refund. In Indiana, only a very low exemption is allotted to protect your tax refund. Therefore, if you were owed a tax refund in the upcoming weeks or months, you may lose a portion or all of that tax refund during the bankruptcy.
3. File As Soon As You Discover Bankruptcy Is Right For You
Many people put off bankruptcy for years. If you have determined with an attorney that you need to file for bankruptcy, file your case as soon as possible. If you are carrying a heavy debt load, talk to an attorney right away. People wait for years to file bankruptcy much to their disadvantage. After you file for bankruptcy, you can get a fresh start to move on with your life.
4. Always Follow the Advice of Your Attorney
Ultimately, the greatest guidance as to the right time to file for bankruptcy will come from your attorney. A consultation with a bankruptcy attorney is many times free. If you follow the advice of a bankruptcy attorney as to the right time for bankruptcy, you can avoid costly mistakes and unnecessary stress.