When you’re looking for legal aid in Milwaukee and you visit a bankruptcy attorney, they’ll like say “now is the best time for you to file,” regardless of when it is. There is some truth to this statement. If you’re in a situation of financial distress, waiting to file may only increase your risk for things like repossession of belongings, garnishment of wages, or even foreclosure on your home. However, now that we’re just into the new year, it truly is a good time to consider filing. Here’s why.
Income tax debt specifications state that you aren’t required to pay off income tax debt until the first day of the following year in bankruptcy. If you have a large amount of debt from taxes, a Chapter 13 bankruptcy is a popular option. In this case, waiting until after the first of the year is a good idea – that means your tax debt from the previous year is considered pre-petition debt.
It’s no secret that people spend more during the holidays, and often it’s done on a credit card. After having built up additional debt from the holidays, the new year is a good time to file as it’s when this debt comes due.
As a rule of thumb, if you’re filing for bankruptcy you should stop using your credit cards right away. If you continue to use your credit cards after you’ve filed, it appears to the courts that you’re doing so with no indication of repaying the debt incurred.
If you’d like to learn more about when to file for bankruptcy, contact the legal aid experts in Milwaukee at Burr Law Offices LLC.