As in lots of things, timing is everything. Timing is important in music, comedy, athletics, you name it.
Timing can be very important in a bankruptcy case, too. There can be multiple reasons for filing bankruptcy sooner as opposed to later. There can be good reasons for delaying a bankruptcy, too. The main point of this article is that, whether you file bankruptcy now or later, it does not hurt to talk to an experienced bankruptcy attorney sooner to find out if there are any timing issues in your situation.
Should I file now?
Apart from the typical reasons of urgency—house is being foreclosed next week; car is about to get repossessed, there are other timing issues that can be very important. Some examples include the following:
In most cases, if a creditor initiates court action, the result is a court judgement, and your wages can be garnished. If your wages are garnished, it may make it harder for you to get your money together to file for bankruptcy protection. If you know a lawsuit is coming, filing sooner rather than later may be the optimum thing to do.
Another factor about court judgements is that once a judgement is entered, it is a lien on your property and can result in the loss or foreclosure sale of that property, including your home. It is important to understand that such judgement liens can also be avoided in bankruptcy under certain circumstances, but this is dependent upon many factors. Filing a bankruptcy case sooner as opposed to later in such cases may make sense because you may be able to avoid the judgement lien in its entirety.
Recent Judgements or Garnishments
Another timing factor for filing sooner as opposed to later may involve whether a creditor obtains more money than the creditor would be entitled to in a in a bankruptcy case. If a creditor gets a judgement against you and you time a bankruptcy case correctly, you may be able to recover such garnishments, and even have the judgement avoided. This may be advantageous for you.
Should I wait to file bankruptcy?
Just as there are good reasons for filing bankruptcy sooner, there can be very good reasons for waiting to file bankruptcy.
Potential lowering of payments on on a vehicle
If you have a car that you bought on which you are making payments but have not quite had it for 2 1/2 years, it may make sense to wait until after the 2 1/2 year mark so that you can lower your car payment, and pay significantly less for the car through a chapter 13 case than if you do not. Consult with your bankruptcy lawyer for further instructions about this.
Just as an unsecured creditor is not allowed to garnish wages or collect payments on the eve of bankruptcy, voluntary payments you have made to such creditors can just as easily justify delaying a filing so that such payments do not have to be repaid to the Trustee. Or, if you have made a transfer of property to someone, it may make sense to wait a while so that the applicable time period expires.
If you have filed all your tax returns, some taxes can be discharged if they are of a certain age. The requirements for determining the dischargeability of taxes can be daunting but it can be accomplished. If you owe state or federal taxes, it may be to your benefit to delay a bankruptcy filing so that the necessary time period passes. This can mean the difference in discharging potentially thousands of dollars in taxes or getting stuck with continuing to pay these claims.
Need to obtain money for bankruptcy fees
Bankruptcy is a complicated legal proceeding and it takes money to file bankruptcy. It takes money to pay for a quality bankruptcy lawyer, too. It is not proper for a bankruptcy lawyer (or any unsecured creditor) to collect fees from you after a case is filed with few exceptions in Chapter 13 cases, for example.
As stated above, timing can be very important. This is not an exclusive list of timing issues but are only examples. If you feel the financial ropes tightening, it can be critical to an experienced bankruptcy attorney now to find out if you may have timing issues with your case which could be important. Your financial future could depend on it.
Check out more valuable information about Guam's Laws and working with Mark Williams, Guam's Best Lawyer, on Dededo Law Office's website, www.GuamLegal.com.