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How Filing Bankruptcy in January Can Help Your Finances

With the start of a new year, many consumers considering bankruptcy may
wonder when it is a good time to file. You may be surprised to learn that
now may be the best time. Discussing your options with a bankruptcy attorney
may help you understand timing more accurately and how it can help your
personal situation. For some, waiting too long may leave the door open for
repossession, lawsuits or garnishments.

If you know you will owe a considerable amount of debt related to income
taxes you may be able to set up a suitable repayment plan under
Chapter 13 bankruptcy. You can repay
tax debt incurred from the previous tax year in an affordable payment plan approved
by the court. In many cases, most recent tax debt (often less than 3 years
old) can be paid in 3 to 5 years in Chapter 13. This keeps the Internal
Revenue Service (IRS) off your back as long as you make timely payments.

Many consumers rack up credit card debt from holiday spending, according
to a recent Gallup poll. The study claims that American’s tend to
spend more daily during the month of December than any other month through
the year. For some credit cards that are an average of $300 more being
spent. Keep in mind your spending habits with your credit card before
you file for protection. Any large or luxury purchases over a certain
dollar amount made within 90 days of filing could be a red flag to the
court. In some cases you may be advised by your attorney to stop using
your cards prior to filing. Discuss your situation with a qualified bankruptcy expert.