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Bankruptcy Law Blog

Thursday, October 8, 2015

Timing Consumer Bankruptcy

What is the Best Time to File for Consumer Bankruptcy?

In some cases, filing for consumer bankruptcy involves a strategic component, particularly if a debtor is seeking to reduce overall liability or avoid issues with an impending life milestone such as divorce. It is also true, however, that waiting too long to file bankruptcy can end up costing you more in the long run which raises the question: when is the best time to file?

Interestingly, the summer months are the most popular when it comes to the raw data of bankruptcy filings. By contrast, January and February see the lowest number of filings – the reasons for which could be anyone’s guess.

Setting the calendar aside, there can be some real benefits to filing as soon as possible. For instance, if you are facing a foreclosure and feel that you have nowhere to turn in terms of housing, filing for consumer bankruptcy will put a stay on the pending proceedings – therefore buying you additional time to devise a future housing plan.

As well, creditors are continuing to charge interest on your secured and unsecured debts each day. In many cases, a debtor has nothing to gain by waiting – and trying – to pay down debts before filing. Often, the most toxic and costly debts (unsecured credit cards) are forgiven in the process anyway.

When should an individual delay filing? If a divorce is on the horizon, a debtor will likely fair better by co-filing with a spouse as opposed to filing alone. Likewise, if two spouses are responsible for the debts together, co-filing will be virtually necessary in order to ensure the proper outcome.

Lastly, delaying filing may be the best option if you truly believe you will be able to pay down your debts without needing bankruptcy protection. Bankruptcy will create a temporary stain on your credit rating, which could make it difficult to secure a loan for a home or a vehicle. The impact will be just as negative, however, for those who believe they can pay down debt and wind up in default.

If you are concerned about when to file for bankruptcy, please do not hesitate to contact the knowledgeable attorneys at Padgett & Robertson, Attorneys at Law, in Mobile, Alabama at 251-342-0264.


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Padgett and Robertson assist clients with Bankruptcy, Personal Bankruptcy, Consumer Bankruptcy, Chapter 7 Bankruptcy, Chapter 13 Bankruptcy and The New Bankruptcy Law in Mobile, Alabama and throughout southern Alabama. Alabama State Bar Association Regulations require the following: "No representation is made that the quality of the legal services to be performed is greater than the quality of legal services performed by other lawyers." 11 U.S.C. 528 of the U.S. Bankruptcy Code requires the following: "We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.”



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