In bankruptcy court, timing may be everything. A complex assortment of rules related to preferences, income and even presumptions of fraud can make choosing the exact date on which you file your Florida Chapter 7 or Chapter 13 bankruptcy case one of the most important decisions you'll make during the bankruptcy process.
Depending on your financial situation, including recent income or bonuses as well as debts such as income taxes or recent purchases on a credit card, the date you file for bankruptcy may determine whether you keep or lose your holiday bonus check from work or whether those back income taxes will be discharged. An experienced Tampa bankruptcy attorney will help you consider all the factors that go into choosing the best time to file for bankruptcy relief, maximizing the debt you are able to discharge and minimizing the property and cash that you must pay out.
There Are Benefits to Filing Now
Once your bankruptcy case is filed, an automatic stay goes into place. Creditors may no longer contact you. Harassing debt collection calls must stop. No collection lawsuits may be filed against you. Any pending foreclosure must also stop. For some, immediately filing bankruptcy and stopping creditor harassment makes filing bankruptcy within days of talking to a bankruptcy attorney the best option.
The filing of your bankruptcy petition also establishes your income for determining bankruptcy eligibility. The bankruptcy court will consider your income over the last six months when deciding if you qualify for a Chapter 7, or liquidation, bankruptcy, or if you should instead be part of a reorganization and repayment plan under Chapter 13.
Once your bankruptcy case is filed, you can immediately start rebuilding your credit. You may no longer be making payments to your credit card company or companies, depending on your particular case, and that money can be used to start a savings account or to get back on top of your car or house payments.
There Are Also Benefits to Filing Later
Although bankruptcy relief is intended for consumers, bankruptcy protection is really intended for your creditors. The bankruptcy court wants to make sure that those who are owed money by you receive the most money from you as legally possible. In order to do that, there are specific rules as to purchases, payments and transfers made within certain time frames prior to filing bankruptcy.
The bankruptcy court can look back anywhere from 90 days and up to a year before you filed bankruptcy for money that it can attempt to get back to pay your creditors. A simple example of this is a debt owed to a family member. If you paid that debt back within a certain amount of time of filing your bankruptcy petition, your bankruptcy trustee may be able to sue your family member to get that money back.
Bankruptcy law regarding 'preferences' and 'preferential transfers' can be quite complex; your bankruptcy attorney can explain this further if you've made preference payments prior to filing for bankruptcy.
When tax debt is part, or all, of the debt you are seeking to discharge through bankruptcy, timing is also an important issue. Tax debts to the Internal Revenue Service can be discharged in bankruptcy if certain requirements are met. Of course, one involves the timing of your bankruptcy filing: more than three years must have passed since your tax returns were due, including any extension periods. This is just one rule related to discharge of tax debts through bankruptcy. There certainly are more.
If you've filed for bankruptcy previously, there are limits on when you can file a second or subsequent bankruptcy.
The ins and outs of bankruptcy laws and rules don't end here. Your Tampa bankruptcy attorney can discuss your financial situation with you and, based on your specific circumstances, determine the best time to file your request for Chapter 7 or Chapter 13 bankruptcy relief.
