When It Is Best to Wait to File Bankruptcy

When You Should Wait to File Bankruptcy

Sometimes waiting to file bankruptcy may make better financial sense depending on personal circumstances. Holding off on filing may give you advantages that can help you retain property, discharge more debt and avoid potential pitfalls that could prevent discharge of debts.

If you’ve moved to another state and want to file bankruptcy, you may need to wait a certain time period before filing if you want to utilize exemptions outlined for that specific state.  This may also be true if there are more exemptions for your new state of residence that helps you keep more assets.  It’s common for debtors to seek bankruptcy protection if their income has changed significantly.  There are different income qualifications for Chapter 7 and Chapter 13 bankruptcy filings.  The means test is used to determine income qualifications, which includes reviewing your income history.

Chapter 13 bankruptcy may help you reduce your car loan payments but you are required to have owned the vehicle for a minimum of 910 days in order to qualify.  While discharging income tax debt can be challenging, it is possible when requirements are met.  There are timing restrictions that should be reviewed before attempting to discharge back income taxes.  Medical bills is a common debt that is eligible for discharge but if you expect to incur more medical debt after you file, the additional debt may not be eligible for discharge.

Other situations you may want to consider delaying your filing includes new credit card charges recently made to an account you plan to add to your bankruptcy case, if you transferred property out of your name, repaid funds borrowed from family or friends and if you anticipate a large tax refund.