According to statistics supplied by the United States Bankruptcy Court for the Eastern District of Pennsylvania, nearly 9,381 bankruptcies have been filed in the current fiscal year. However, these filings are not distributed evenly across the year. The number of bankruptcy cases fluctuates from month to month, which begs the question: is there really such a thing as a “best” time to file for bankruptcy? Our Philadelphia bankruptcy attorneys examine six factors you should weigh before you declare bankruptcy.
Should I File for Bankruptcy in January 2017?
Whether you’re trying to lose weight, travel more, or pick up a new skill, January is a time for fresh starts and new beginnings, a time when people are inspired to make dramatic changes to their lives. With the take-charge spirit of New Year’s on your mind, you may be wondering whether now is the right time to “take the plunge” and commit to filing for bankruptcy in January.
While we would love to simplify your life by telling you that there is an objectively “best” or “worst” time to file, the truth of the matter is that the right time for bankruptcy varies from person to person. The good news, however, is that by understanding how timing could affect your case, you’ll have a stronger sense of how to plan advantageously so that you can get the most out of your bankruptcy. With that in mind, let’s look at some factors to consider when you’re thinking about bankruptcy in Pennsylvania.
You may want to consider filing in January – or at least, sooner rather than later – if any of the following statements are true:
- You are at risk of imminent foreclosure or repossession. When you file for bankruptcy, you are immediately (but temporarily) protected against creditors by a court injunction known as the automatic stay. The automatic stay can stop or at least delay collection actions, which gives you time to work out a financial game plan.
- You expect to receive an inheritance, bonus, or valuable property in the future. In Chapter 7 bankruptcy, a court-appointed official called a trustee can sell property that is not protected by exemptions. You must list your property and assets at the outset of your case.
- You are planning to move out-of-state. When you file for bankruptcy, you can protect certain property by using exemptions. There are federal exemptions, which are uniform, and state exemptions, which can vary widely. Some states require you to use a certain set of exemptions, while others allow you to choose. If you are moving to a state in which the exemptions are less generous, you may want to file for bankruptcy now, while you can still take advantage of the exemptions in your
3 Reasons to Delay Declaring Bankruptcy in Pennsylvania
Of course, there two sides to every coin. While there are some scenarios where it’s prudent to file in the near future, there are also situations where it makes more financial sense to delay filing. You may want to consider waiting to file for bankruptcy if:
- You’re expecting to incur more debts in the near future. Bankruptcy can only help you with debts you already have, so if you know that you have a major expense coming up, such as a surgical procedure, you may want to wait until afterward to file.
- You just lost your job and want to file under Chapter 7. Chapter 7 bankruptcy is intended for filers who do not have the financial means to accommodate Chapter 13 bankruptcy, which is longer in duration and involves making more payments. The means test, which evaluates your finances, dates back for a period of six months, which means that if you recently lost a high-income job, you will appear on the test to have more income than you actually do.
- You recently made a large purchase with your credit card. Credit card debts can be eliminated, or discharged, in bankruptcy. However, fraud will cause your case to be dismissed (and can lead to criminal prosecution). If you made a major purchase recently – for instance, an expensive Christmas gift that you purchased in December – your creditors may presume, and attempt to show, that you are trying to commit fraud.
Philadelphia Bankruptcy Lawyers Handling Chapter 7, 11, and 13 Cases
Bankruptcy can be a tremendously useful tool to help protect you from creditor harassment, protect certain assets or pieces of property, get control of your finances, and empower yourself to start rebuilding good credit. However, filing can be a highly complex and lengthy process, so it is critical that you are guided by an experienced attorney who is deeply familiar with the laws and procedures governing Chapter 7 and Chapter 13 bankruptcy in Pennsylvania.
Allow the skilled attorneys of Sadek & Cooper to counsel and advise you. We can thoroughly analyze your existing financial situation, debts, and goals in order to develop a personalized plan. Whether the best time for you to file is just around the corner or miles down the road, an accomplished and knowledgeable Philadelphia Chapter 7 bankruptcy lawyer is here to help make bankruptcy work for you. For a free and completely confidential legal consultation, call our law offices at (215) 995-2543.