The holidays are here and for many people contemplating filing bankruptcy, it can be a struggle to stay afloat with looming bills to pay. If you are somebody who is considering filing bankruptcy you should know that when filing bankruptcy, the timing of your filing can have significant consequences as to whether your case will be processed smoothly.
Because it is the holiday season, debtors should know that holiday spending on credit should be kept to a minimum as all debts incurred 90 days prior to your bankruptcy filing can result in one of those creditors objecting to your bankruptcy discharge and you having to pay back that debt in full. In summary, don’t go on a crazy holiday shopping and travel spree prior to filing bankruptcy. I have been told by some clients that they did this prior to the bankruptcy rule changes in 2005 and everything turned out ok, but nowadays any significant spending will get you in trouble. If you have incurred a large debt in a short period of time in the last year prior to filing without making any payments on it i.e. over 10K you might want to wait longer than 90 days to file your case. This is because a creditor can always bring a claim of abuse if they believe that you intended never to pay on this debt. Although the creditor would have a tough time proving intent, it would be best to avoid the whole situation in general as attorney fees for fighting such action are charged in addition to the normal bankruptcy filing fees.
In order challenge the discharge of a debt, an adversary case must be filed which is a separate litigation court case that can go to trial if necessary. This process can be time consuming and draining on debtors so if a motion to dismiss the case is unsuccessful, then you would have to look at your settlement options moving forward.
If you have additional questions please call Symmes Law Group at 206-682-7975 to schedule your free initial consultation with a Washington state bankruptcy attorney.