When Should You File Bankruptcy? Is Earlier in the Year Better?

Too many people struggle with insurmountable debt. If you are in this category and can’t see a way you can alleviate the situation, filing bankruptcy might be your best option. However, you might wonder when you should file and if earlier in the year is better.

Generally speaking, many people file bankruptcy at certain times for a specific reason. If you are worried about your home going into foreclosure, you can file sooner so that you can keep the property. As soon as you file, lenders will likely refuse to get into a negotiation or continue negotiations over your mortgage. In turn, this will cancel out the promissory note of your mortgage. However, if you are looking for a mortgage modification, you should hold off on filing until you know how the modification is going.

There are other reasons to wait to file bankruptcy. For example, if you are expecting a reasonable tax refund that you need for spending on necessities, it’s better to file for bankruptcy after receiving the refund. As a result, you would get the full benefit of that money.

Another scenario is that you have assets that have a greater value than the amount you are allowed to keep in bankruptcy. This would mean the assets are exempt. If you file bankruptcy later, the assets can depreciate, which would also make the property exempt.

Then, there is a situation of having nonexempt assets, which are those that the bankruptcy trustee can seize to pay back your creditors. These are items other than your home, vehicle, clothing and other necessities. If you were to sell that property for the fair market value prior to filing bankruptcy and spend the money on things you need, you would benefit. You could also use the money to purchase property that is exempt. However, it’s important to consult with a lawyer before doing that as this can be a slippery slope.

If you are in Virginia and are considering bankruptcy, you need Canfield Wells on your side. The Henrico VA bankruptcy lawyers will work hard to protect your rights. Contact Canfield Wells at your earliest convenience to discuss your case with experienced Henrico VA bankruptcy lawyers.