Exactly when a Bankruptcy petition is filed can make a big difference in your case.
There’s an old Vaudeville bit that has one comedian talking to another. The first asks: “What is the most important thing about com…” and before he can finish his question, the other comedian answers “Timing.” Ok, not very funny; but just as true about comedy as it is about filing bankruptcy. A mistake in the timing can leave you with a much more ineffective or difficult case and you otherwise might have.
In bankruptcy, there are several reasons to file the petition earlier rather than later:
1. End the annoying credit calls and letters;
2. Stop a garnishment or attachment or even a foreclosure;
3. Lock in your income for the past 6 months (avoid listing a year-end bonus on the means test (B22));
4. Start rebuilding your credit;
And there are several reasons where waiting might make the Bankruptcy more effective:
1. Avoid the preference period for that payment to mom;
2. Wait more than 90 days to avoid a presumption of fraud when you used a credit card for a luxury purchase under (523(a)(2));
3. Wait until more than 6 months have passed from receiving a Christmas bonus;
4. Wait until enough time has passed to be able to discharge some taxes;
5. Wait until enough time has passed since your last bankruptcy.
You get the idea. The exact day you file your bankruptcy petition can make quite a difference in the administration of your case. Many bankruptcies benefit or suffer because of filing a day or two early or a week late. Check with a competent bankruptcy attorney in your area to get this right. It’s simply too important to leave to chance.
image credit: redstamp.com
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Last modified: October 22, 2012