When you are overwhelmed by debt, filing for bankruptcy may be the right decision to get a fresh financial start. While filing for bankruptcy may seem like the best solution when you are drowning in debt, there are several reasons why you may want to delay filing for bankruptcy.
If you are considering filing for bankruptcy, you might want to speak with an attorney to determine if now is the right time. Our Bay Area bankruptcy attorney at the Law Offices of Melanie Tavare can evaluate your particular circumstances and determine if it is best to file now or delay filing.
Let’s discuss five potential reasons to consider putting off filing for bankruptcy until a later time.
If you have recently received valuable gifts from family members or friends, it may be worth delaying filing for bankruptcy. Depending on the size and nature of the gift, it may not be exempt from the bankruptcy estate. This means that the trustee can use it to pay off your creditors. If enough time has passed since receiving the gift, it may no longer be considered part of the bankruptcy estate, allowing you to keep it.
If you sold property before filing for bankruptcy, the proceeds from the sale might be considered part of the bankruptcy estate. This can be a tricky situation, as the timing of the sale can impact whether the proceeds are exempt or not. If you are planning on selling property, it is best to consult with a bankruptcy attorney to determine the best timing for the sale.
Taking on new debt before filing for bankruptcy can complicate the process and potentially even get your case dismissed. Creditors may challenge the discharge of those debts, putting your bankruptcy status in jeopardy. Additionally, large cash advances taken close to the filing date can also be viewed as fraudulent behavior by the court.
If you expect to receive a significant amount of money from an award or settlement in a pending lawsuit, it may be advantageous to delay filing for bankruptcy. Depending on the size and nature of the award, it may be exempt from the bankruptcy estate, which means you will be allowed to keep it. However, if you have already filed for bankruptcy, the award will likely be considered part of the estate and used to pay off creditors.
If you have already filed for bankruptcy in the past, there are limitations on how soon you can file again. Filing too soon after a previous bankruptcy discharge can result in your case being dismissed, leaving you without any protection from creditors. According to the official website of the U.S. Bankruptcy Court, the waiting time between bankruptcy is two to eight years depending on the chapter of the current and previous bankruptcies.
Filing for bankruptcy is a major decision that can have significant consequences for your financial future. While filing for bankruptcy may seem like the best thing you can do when overwhelmed by debt, there are specific scenarios where delaying filing for bankruptcy may be in your best interest. You might want to get a personalized consultation with an attorney at the Law Offices of Melanie Tavare to determine the best course of action for your unique circumstances. Call 510-255-4646 to schedule a case review.
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