How Should I Time the Filing of My Bankruptcy in New York City?

To get the most out of filing for bankruptcy in New York City you need to time your filing date carefully. There are numerous things to consider, and every case is unique. Sometimes it’s best to file immediately, and sometimes best to wait.

If you are facing a foreclosure or worried your car could be repossessed at any moment then filing bankruptcy right away can be advantageous. The moment you file your petition any foreclosure or repossession action will be immediately halted through the “automatic stay”. Your creditors won’t be able to foreclose or repossess during the open bankruptcy case. This can buy you some valuable time to address back payments or to fix things moving forward without losing your property.

Likewise, if you are being sued by a creditor and have no legal defense against the claim it usually makes sense to file for bankruptcy sooner rather than later. If your creditor receives a default judgment against you, then you may have some increased difficulty in getting rid of the lien put on your property if you don’t file bankruptcy right away. Filing bankruptcy right away can also be the best move if you are expecting to receive more property in the near future. If you will be receiving any nonexempt property soon, then you may be able to file bankruptcy quickly to keep this property out of your bankruptcy estate and out of the hands of the trustee before you receive it.

On the other hand, if you just lost a great job or are expecting a major reduction in income then you could have a better chance of passing the bankruptcy means test by waiting a few months as the eligibility is based on a six month average. Delaying your filing date can also be very helpful in reducing the principal amounts of car loans, and dismissing older income tax obligations. “Cramming down” car loans and eliminating older income tax debts have time limits that may need to be satisfied by waiting a little while before you file. If you are expecting to take on more medical debt in the near future, or are expecting a large tax return coming your way then waiting to file is also usually a good idea. You want to be able to include all of your medical debt in your bankruptcy so they are all wiped away with your discharge. Spending a large tax return before filing will also let you get the most out of the money instead of forfeiting it to your creditors.

It can also be very important to delay filing bankruptcy if you have recently paid back friends or family on a personal loan, put any new charges on your credit card or transferred any property out of your name. These things could come back to haunt you in a bankruptcy if you have not given them enough time before filing.

There are advantages and disadvantages to both filing right away, and to delaying a bankruptcy. Every financial situation is unique, and there are many things to consider. If you are underwater on your bills and think you might be in need of bankruptcy protection, speak to an attorney right away. If it is in your best interests to delay your filing, a qualified bankruptcy attorney will advise you as such and will work with you to best schedule your filing date. Alternatively, if you are facing an immediate foreclosure or have already had a car repossessed then your attorney can file bankruptcy and reverse the process in as little as 24 hours.

If you live in New York City and think bankruptcy protection could be right for you please contact the Law Office of William Walder online or at 212.244.2882 to arrange a free consultation. We will look at your unique situation to determine if you should file now or if it is to your advantage to wait. We maintain a 99% Chapter 7 discharge record in New York City as of 8/31/16 and provide affordable bankruptcy assistance in to all New Yorkers.

This article is intended for educational purposes only. By reading this no attorney client privilege has been created.