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When is the best time to file bankruptcy?

On Behalf of | May 10, 2016 | Bankruptcy, Firm News

The best time to file bankruptcy is probably a year or two ago. While I say that somewhat tongue-in-cheek, it is largely true – most people that I see probably could have and should have filed bankruptcy a year or two ago, but they held off, either because they were frightened of the prospect of filing bankruptcy, they wanted to see if they could dig their way out of debt, or hope something miraculous would happened, or maybe all of the above. The fact is, having a bankruptcy in front of you is significantly more difficult to endure emotionally, then having a bankruptcy behind you. I can confidently tell you that, having helped thousands of people through this process. Nobody ever really regrets having filed bankruptcy once it is done, and once it is done, you can focus on what is ahead in your life, rather than having that feeling when a bankruptcy is in front of you, which is largely focusing on what is in your rearview mirror.

That is not to say that the timing of filing a bankruptcy is all about emotions. There can be a lot of factors that go into the right time to file, such as ensuring you are under the median (which is based on the prior six months of income), ensuring you have not made recent payments to relatives, and ensuring that all of your assets are exempt. In certain circumstances, upcoming tax refunds could have an impact on that. By the same token, if you owe back taxes, sometimes waiting out certain time frames will put you into a position where they can get discharged.

Your Anoka bankruptcy attorney can help with this determination. We take an individualized, case-by-case approach with our clients, and help them determine the best time frame for them to file. Just as important as the decision of whether to file bankruptcy, is the decision of when to file bankruptcy.