How Long Should You Wait After Incurring Debt to File for Bankruptcy?

Admin on December 30, 2022 Posted in Bankruptcy Law, Blog

The decision to file for bankruptcy is an important one, especially for those struggling with debt. When done correctly, it can help you get a fresh financial start and free you from the burden of debt. However, there are certain rules and regulations that must be followed when filing for bankruptcy to ensure that you do not face any accusations of fraud. One such rule is the timeline for filing for bankruptcy after incurring debt.

Let’s take a closer look at what the timeline looks like and how long you should wait before filing for bankruptcy. At The Law Offices of Melanie Tavare, our firm is dedicated to helping consumers throughout the Bay Area get the debt relief they deserve. If you are planning to file for bankruptcy, contact our office in Oakland or Hayward to speak with a bankruptcy attorney.

The Waiting Period After Incurring Debt

When considering filing for bankruptcy, it is important to understand the timeline around incurring debt. As a general rule, you should wait at least 90 days after incurring debt before filing your petition with the court. This waiting period ensures that creditors have enough time to validate any debts they believe they are owed so that there is no suspicion of fraud or abuse in your case.

In addition to waiting 90 days after incurring debt, you should also make sure that all of your debts are verified by creditors prior to submitting your petition. This helps ensure that there will be no issues with creditors disputing your debt later on down the line and increases the chances of having your debts discharged without issue.

Why You Want to Avoid Accusations of Bankruptcy Fraud

Although racking up new debt short before filing for bankruptcy is a common reason people are accused of bankruptcy fraud, an estimated 70% of all bankruptcy fraud cases involve the concealment of assets, according to the Legal Information Institute. Either way, it is best to avoid accusations of bankruptcy fraud at all costs.

If you are accused of bankruptcy fraud, you could face serious criminal charges that carry penalties such as hefty fines and imprisonment. Even if you are innocent of any wrongdoing, an accusation alone may be enough to ruin your chances of getting debt relief through bankruptcy. Additionally, if the court discovers that you have lied about any information on your forms or documents related to your case, they could deny your discharge altogether and leave you with all of your debts still intact.

The Benefits of Bankruptcy

Filing for bankruptcy can provide numerous benefits, including a fresh financial start and relief from overwhelming debt levels. It can also help protect assets such as a home or car by preventing creditors from seizing them during a collection process. But perhaps most importantly, it allows individuals to rebuild their credit over time if they start making payments on their debts soon after filing for bankruptcy protection. This can help individuals qualify for loans or other forms of financing in the future when they may need them most.

Contact The Law Offices of Melanie Tavare to Learn More About Bankruptcy

Filing for bankruptcy can be an effective way to get out from under crushing debt levels and start fresh, financially speaking. That being said, it is important to follow all applicable rules and regulations when doing so in order to avoid any potential accusations of fraud or abuse. Failure to wait an adequate amount of time to file for bankruptcy after racking up new debt is not the only mistake people make when filing for bankruptcy. Learn more about the common mistakes people make when filing for bankruptcy – and ways to avoid them – by consulting with a bankruptcy attorney at The Law Offices of Melanie Tavare. Call 510 255 4646 for a case review.