Small Business Law

There are many legal pitfalls throughout the life cycle of a small business. You need sound legal advice during these periods. As your attorney, I focus on your needs while keeping your goals and expectations in mind.

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Business Debt Solutions

Helping businesses restructure and eliminate debt.

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Tax Controversy and Litigation

Assisting Taxpayers with IRS issues in all 50 states

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Estate Planning

What is Estate Planning? And Why Do I Need It?

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Personal Bankruptcy

Get a Fresh Start and Achieve Debt Relief Today

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Bankruptcy Attorney

Call 215-344-8343 for debt relief with Moretsky Law.

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When is the best time to file for bankruptcy?

There are many considerations to take into account before deciding when to file for bankruptcy. Sometimes, the difference between filing one month and the next, or even one day and the next, can make all the difference. Some good reasons include a pending foreclosure or sheriff’s sale of your home, garnished wages, an eviction that is around the corner, or car repossession. Any of these situations might require an immediate filing. Assuming none of these things have happened or are about to happen, it makes sense to put some thought into deciding the best time to file.

Expecting Increase in Your Debts

If you anticipate that your debt, such as medical bills or other necessities, will increase in the near future, it may be advisable to wait until your debt peaks before filing for bankruptcy. This should not be confused with running up credit card bills or splurging on a vacation when you have no intention of paying these debts. There is a strong chance that such debts will not be discharged in bankruptcy.

Tax Obligations

If you have tax obligations from previous years, it may be a good idea to wait for specific time periods to expire. Bankruptcy offers individuals the ability to discharge, or be excused, from paying some of their tax debts. However, it is important to keep in mind that dischargeability depends on the type of taxes, the timing of the filed return, tolling periods, whether returns were filed and other factors. Due to the complexity of issues surrounding tax obligations, it is important to discuss this matter with experienced bankruptcy counsel.

Ensuring Income is at Its Lowest When Filing

Another reason to wait before filing for bankruptcy is to decrease income. In determining your eligibility for chapter 7 bankruptcy and your disposable income for chapter 13 purposes, the Bankruptcy Code looks to your monthly income for the previous six months. If your income will decrease in the near future, it may be advisable to wait so as to increase your chances for chapter 7 eligibility or decrease your payments under a chapter 13 repayment plan. Conversely, if you expect your income to increase in the near future, you may want to file earlier for the same reasons mentioned above.

There are many other variables that can influence the timing of a bankruptcy filing. For this reason, it is important to discuss the issue with your bankruptcy attorney.

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