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Bankruptcy & Timing

I find myself telling clients all the time that filing a bankruptcy is more art than science.

And it really is….but it makes my clients crazy when I say that right before I say “We need to wait days/months/years to file your case or you are going to have a real problem/the best possible outcome.”

There is a lot of bad information out there about bankruptcy.  More than I can ever combat in a million blog posts or articles.  Everyone responds to the above statement with “But my cousin filed and she didn’t have to wait” or “My uncle twice removed says that I can transfer a Porsche to whomever I want and it won’t affect my case.”

Sigh…

If I have said it once I have said it 100 times, every case is different.  There may be very very very good reasons for waiting that I will thoroughly explain to you if you are filing with my office.

To Name a Few:

Credit Card Usage

If you have used a credit card for a luxury good (plane tickets, cruise tickets, hotels that are not work related, etc) in the last ninety days, we have to wait to file your case.  This is because these purchases would be presumed to be fraud, you were running up the card in anticipation of a bankruptcy case, and we carry the burden of proving that it was not, which is a steep uphill climb made up of litigation.

My general rule here is to wait as long as I can.  I like to have six months of over the minimum amount of payment history between a luxury purchase and a filing date.  I really like to have no credit card usage whatsoever within 90 days of the filing and if we have the time to wait I won’t file you until you have 90 days in the clear.

Obviously, every situation is different (more art than science remember) so I will review each of your statements carefully and advise you on your specific situation.

Transfer of ANY Property

I have told many many clients in first consultations or on the phone that they are not doing themselves or me any favors by transferring any form of property to a relative or family member BECAUSE they are filing bankruptcy.

The transfer of property prior to bankruptcy triggers the “fraudulent transfer” issue and that can be a big issue when we are talking about timing.  Best case scenario it is not a big deal because the property isn’t worth much or nothing.  Worst case scenario is that you are looking at a four year wait to file.

Always talk to us before you transfer any kind of property if you are serious about a bankruptcy case.

Too Much Income/Not Enough Income

Timing is everything here.  EVERYTHING.

Income is such a massive part of your bankruptcy case, when you have it, when you don’t, are you paid on a 10 month schedule (teachers), is your work seasonal (construction workers), and the list goes on and on.

Your income is going to stipulate how much you pay or don’t pay to your creditors.  We are talking about your wallet here.  Waiting may be helpful, not filing at a certain time may cost you big money.

This is a place where the real “art” of putting together a bankruptcy case comes in.  The difference between an experienced bankruptcy that knows their Trustees and Judges’ preferences well and someone that just does bankruptcy when there aren’t enough divorce cases to pay the bills is going to make a real dollars and cents difference.

 The Bottom Line

These are just some of the reasons we may discuss with you when we go over possible timing issues in your case.  Every bankruptcy case is different so we will evaluate your case and go over any timing issues that need to be handled to get the best possible outcome for you.

Have questions about how we can help you file a bankruptcy case?  Give us a call at 732-302-9600 or fill out our online consultation form and we will call you?