Not everyone has the luxury of deciding when to file bankruptcy.  Often, events such as foreclosures, garnishments, or repossessions force an immediate bankruptcy filing to protect against loss of precious assets.  However, bankruptcy time can be important. Here are some things to consider for those who have the option of choosing when to file there are things to consider:


  • What is the likelihood of more debt? – Usually this refers to medical debt, which can be insurmountable. Whenever possible, an individual or family experiencing an on-going health care problem that generates medical debt, or a lapse in insurance coverage, should wait to file until the problem is resolved.  The benefit of a bankruptcy discharge can be lost if it’s immediately followed by a mountain of medical debt.


  • Expecting an Income tax refund? – Are you about to receive an income tax refund? If so, then it might make sense to wait until after you’re received and spent your refund on a necessary expense, or use the refund to pay for the bankruptcy filing.


  • Expecting an Inheritance? – If a person is expecting an inheritance from a person who hasn’t died yet, then that inheritance is not an asset for bankruptcy purposes. In such a case, it might be best to file sooner rather than risk losing the inheritance to pay creditor’s claims in a bankruptcy.


  • Expecting an increase in income? – One of the factors that determines the amount you have to pay creditors, if any, is your income in the month’s before you file bankruptcy. In some cases, such as when you’ve been out of work due to illness and are about to return to gainful employment, it makes sense to file sooner rather than waiting until your income has increased.


  • The overall economy – During economic downturns, when credit is difficult to get, filing a bankruptcy can be strategic good choice. When things improve, time will have passed since the bankruptcy filing, making it more likely that you will be able to obtain approval for mortgages and other forms of credit.


If you’re in need of an economic fresh start, but unsure of the timing, an experienced consumer bankruptcy attorney may be able to help.  Don’t hesitate to seek a free consultation.  You may save yourself years of struggle and lost opportunity.  Time lost can never be recovered.