Is There A Right Time Of Year To File Bankruptcy?
When you are having a hard time making ends meet, it is important to find a solution quickly. If bankruptcy is on your list of things to consider, you might be wondering if there is any special timing that you should follow when you file your case. Or, if you are going through a divorce and need to get some financial relief, you may question whether the timing of your divorce should be close to the timing of your bankruptcy. There are arguments that can be made that help to determine the timing of a bankruptcy case, and sometimes part of the rationale for when you file depends on the time of year.
One thing to keep in mind when filing for bankruptcy is whether you have filed and/or you’re your taxes for the year yet. With income tax returns due in April of each year, you may want to file bankruptcy before taxes, or wait a while after your return is filed, depending on your tax liability. Here are a few things to keep in mind when thinking about what time of year is best to file bankruptcy:
● If you file before taxes are due to be submitted, you will be able to tell the Trustee that you have not yet filed your return. If you do this though, be prepared for the Trustee assigned to your case to ask that you give your completed returns directly to your attorney so they can be turned over to the attorney for the IRS. If any refund is due to you, the bankruptcy trustee may claim those funds.
● If you file a bankruptcy case well after tax season and have already filed a return, received a refund, and spent the money received, the chances are low that the Trustee will ask you to pay back the refunded amount into your bankruptcy case.
It is important to remember that if you have not filed taxes yet, and are required to do so, you may not receive a bankruptcy discharge until your return is finalized. This makes the timing tricky, but a qualified attorney can give you options so you can make the most of your case. When divorce is part of the equation, the timing issue becomes less significant because child support is not dischargeable in bankruptcy and depending on the wording of your divorce decree, you may not be able to eliminate spousal support payments either. The bottom line is that you will need to file a case when it is in your best financial benefit to do so, and figuring this out takes the help of a trained legal professional. Call our office today to find out your options, and let us help you get back on solid financial footing.
For more information about bankruptcy and how to time the filing of your case, contact us at www.DsouzaLegalGroup.com.