The holiday season is officially upon us, which means folks are counting down to the end of the year. People often assume that this is Hanson & Payne’s busy season, with Milwaukee area residents and businesses rushing to file for bankruptcy before the clock strikes midnight on December 31. But bankruptcy doesn’t really work like that.
There is no reason someone who is considering filing for bankruptcy should rush to do so before the end of the year. Instead, a potential filer should consult with an experienced bankruptcy attorney like those at Hanson & Payne to figure out the optimal time for filing their case.
Predicting Your Financial Future
It can be tempting to file for bankruptcy as soon as things start going wrong. When you are in panic mode, a legal lifeline that will stop the clock on debt collection and allow you to get your life or business back on track sounds ideal.
However, it is important to remember that filing for bankruptcy is not the equivalent of waving a magic wand. If it is likely that things will get worse for you financially over the coming months, it may be better to wait to file until you have really hit rock bottom.
Debts that are accumulated after a case is filed cannot be forgiven, even if they mean the bankruptcy will not do as much to fix things as you had hoped.
On the other hand, if you expect to inherit a substantial amount of money in the coming months, or know to restructure your business will help you ink a particular business deal, it may be better to file now than wait.
Being realistic about what the future holds for your family or your business, and timing your bankruptcy to maximize its benefit to you, is critical. This is something Hanson & Payne discusses with our clients in depth. We can’t predict the future, but we can explain how the bankruptcy law will treat you under various circumstances.
Your Holiday Shopping Spree May Come Back To Haunt You
Another factor to consider when timing your bankruptcy filing is your holiday spending. If you go on a shopping spree to max out your credit cards, buy a bunch of luxury goods, or do a cash advance within 90 days of filing for bankruptcy, the credit card company can file a claim against you and ask the bankruptcy court not to forgive your debts.
You might also have your case dismissed and be barred from filing for bankruptcy for several years if the court thinks you are attempting to commit fraud.
Some courts have ruled that credit card charges for anything other than basic items like food and gas are fraudulent, so it is best to be cautious about taking on extra debt in the months before filing for bankruptcy.
While You Are Waiting
If you choose to wait to file for bankruptcy there are still things you can do to improve your financial outlook. Many creditors are willing to cut deals with debtors who are unable to make their payments in hopes of recouping some of the money they are owed. It may be possible to negotiate lower monthly payments, lower interest rates, or even get some of your debt forgiven. Sometimes these negotiations go so well that bankruptcy can be avoided.
A Milwaukee Bankruptcy Firm You Can Trust
At Hanson & Payne, LLC we work with our Milwaukee area bankruptcy clients to make sure the timing is right for them to maximize the benefits of a bankruptcy filing. We work with our clients to figure out if rushing to the courthouse is the right move, or if it would be better to wait a few months before filing. Our focus is on figuring out what is right for each individual client. Whether you are looking for a bankruptcy attorney in the Milwaukee area that you can trust to handle your simple Chapter 7 case or a complex business bankruptcy, Hanson & Panye, LLC is ready to take your call.