Both the holiday season and bankruptcy can be stressful for many people. When these two matters collide, planning and decision-making can become especially burdensome.
It is often thought that pushing bankruptcy off until later is a better financial move, but there are many factors to consider before making a decision.
Filing for bankruptcy after the holidays may seem like a way of starting the new year with a clean slate. However, even if some debts are dischargeable, the process can take some time to go through. Another component to think about is potential year-end rewards such as bonuses, which can make the debtor’s income look higher than it is. If the court decides to change the chapter of the Bankruptcy Code due to a falsely represented income, a discharge can take several years.
Some people file for bankruptcy after holiday shopping in hopes that their debt will go away. Unfortunately, large cash advances and credit purchases can be non-dischargeable if they accrued within three months before the bankruptcy filing. On top of this, the court may find the debtor guilty of fraud and reject the case. Understanding the terms and conditions of bankruptcy can help a person avoid owing a great deal of money later.
For many people, spring, summer and early fall are the most helpful seasons to file for bankruptcy. This way, a person is more likely to already have a discharge by the end of the year. The right timing can ensure peace of mind for the holiday season.