Filing For Bankruptcy: Timing Matters

For many people, finances often take the back seat or are swept under the rug, that is, until a problem arises. Many people experience financial hardship that builds over time, while many more simply fall onto hard times unexpectedly. Regardless of how you end up in debt, one thing that you cannot afford during financial hardship is to waste time.

Debt Relief Decisions

Most people never prepare for the need to file for bankruptcy, but those that do seek bankruptcy protection often find they are faced with big decisions in a short amount of time. However, rushing into bankruptcy may not be a good idea. One of the most important aspects to consider before seeking bankruptcy protection is your financial history.

First, your financial details will be under review. The court will take a detailed look into the nature of your income, property and assets; and compare those to your secured and unsecured debts. Therefore, it is important that your financial profile remain somewhat consistent in the time leading up to your bankruptcy filing. Acquiring too much debt within the months leading up to a filing could be viewed as suspicious. In some cases, it may lead to further investigations of fraud, and may even result in ineligibility to file.

On the other hand, transferring or selling off assets within the days leading up to your filing may also be viewed negatively by the court. Similarly, significant changes to your income levels could influence your case. For example, an increase in income may disqualify you from a Chapter 7 case, or cause an increase in your monthly payments during a Chapter 13 plan.

Finally, the timing of your case could also be influenced by whether you have filed for bankruptcy in the past. If you obtained a discharged in a Chapter 7 case in the past, you will be required to wait at least 8 years before filing for another Chapter 7; or 4 years before filing for Chapter 13. If your prior debt discharge was under a Chapter 13 case, you will be required to wait at least 6 years before becoming eligible for a Chapter 7.

If you have questions about your debt or how bankruptcy can give you a fresh start, contact our Sacramento bankruptcy office today at (916) 459-2364.