When Should I Delay Filing for Bankruptcy?

 Posted on October 31, 2019 in Bankruptcy Procedure

Declaring bankruptcy can get you out of a less-than-favorable financial situation when you are in need, but your circumstances will dictate which type of bankruptcy you are eligible for and how much the bankruptcy will help you. Once you have figured out that you want to file for bankruptcy, you must then determine when your most opportune time to file is. In certain situations, you may want to delay filing for bankruptcy. Delaying your bankruptcy can sometimes allow you to keep more of your money, protect a friend or family member’s money or even increase your chances of qualifying for a Chapter 7 bankruptcy. Here are a few situations in which you may want to consider delaying filing for bankruptcy.

You Paid Money Owed to a Family Member Too Close to Filing

If you pay certain creditors $600 or more prior to receiving a discharge, your bankruptcy trustee could demand the money back from the creditor. This is called a preference because you have put that creditor in a better position than your other creditors. The preference period for most creditors is 90 days prior to filing for bankruptcy. For “insiders,” such as friends or family members, the preference period is one year prior to filing for bankruptcy.

You Recently Transferred or Gifted Money or Property to Someone

If you give away or gift property or money and get nothing in return, you could also face allegations of fraudulent transfer. Even if the property or money was a gift given with good intentions, you can still face these allegations if you file for bankruptcy less than two years after you give or transfer the property or money.

Your Income Has Decreased or You Expect Your Income to Decrease

If you want to file for a Chapter 7 bankruptcy, you will have to pass what is called the means test. The means test compares your income to the median income in your state. If you fail the means test, it will be extremely difficult for you to qualify for a Chapter 7 bankruptcy, if you can even qualify at all. If you know that you currently make too much to qualify, but that you will not be making as much in the future, you should wait to file for bankruptcy.

Our New Braunfels, TX Bankruptcy Attorney Can Advise You When to File

Like many things in life, timing is everything when it comes to bankruptcy. Even just a few days’ time can mean the difference between discharging certain debts and being forced to repay them. If you are unsure of when the best time to file for bankruptcy is, you should contact our skilled San Antonio, TX bankruptcy lawyer today. At the Law Offices of Chance M. McGhee, we will examine your case and advise you as to when you should file for bankruptcy so you can benefit from it the most. Call our office today at 210-342-3400 to schedule a free consultation.

Sources:

https://www.thebalance.com/what-is-chapter-7-bankruptcy-316202

https://www.law.cornell.edu/uscode/text/11/547

https://www.law.cornell.edu/uscode/text/11/548