Five timing factors to consider when filing bankruptcy

Bankruptcy timing is critical. Debtors frequently file too soon or too late. In either instance, they lose possible benefits from their bankruptcy.

Some tips:

1) Collect your tax refunds before you file. Tax refunds due to you when you file will be claimed by your trustee

2) Don’t file bankruptcy too soon after paying a past debt if you want the creditor to keep the payment or the payments may be recoverable by the trustee as a voidable preference. Payments made within two years to relatives or other insiders are also recoverable

3) If you anticipate future debts, then file after they can be discharged in bankruptcy. An example would be continuing medical costs due to an extended illness

4) Make certain you owned your home long enough to qualify for homestead protection before you file bankruptcy

5) Wait to file if you incurred bills for non-essentials. More recent charges are not dischargeable.

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