Don’t Wait Until Year-End: Why Fall Is A Great Time To File Chapter 7 Bankruptcy In Florida

In this article, you can discover…

• Which end-of-year bankruptcy and tax deadlines you should consider.
• The advantages of completing Chapter 7 bankruptcy before tax season.
• How a bankruptcy attorney can help you get ahead of year-end financial stress.

What Are The Outcomes Of Waiting Until The Very End Of The Year To File Chapter 7 Bankruptcy?

When you file for Chapter 7 bankruptcy in the last quarter of the year (October or later), you’re not very far away from tax season, even if tax season feels far off. And the tax refund you receive can be regarded as a non-exempt asset. This would make the refund the property of the bankruptcy estate, and it would then be used by the trustee of that estate to help pay back your debt if you are unable to exempt it(or a portion of it).

But when you file for bankruptcy in the middle of the year, the trustee will be focusing more deeply on the previous year’s tax returns and won’t be as interested in the upcoming year’s returns. As a result, many people wait until they’ve received and spent their tax refunds to file for Chapter 7 bankruptcy.

This strategy has issues of its own, however, as you will have to show how you spent your tax refund as part of the filing process.

What Year-End Bankruptcy Deadlines And Timing Issues Should I Consider?

Some people receive a work-related bonus at the end of the year. If it’s a sizable bonus, this could impact your six-month average, making it harder to qualify for bankruptcy. The rule of thumb is, if you get your work-related bonus in December, make an effort to file before you receive the bonus. And if you get your annual bonus in January, try to file beforehand.

Your bankruptcy attorney will review your projected tax refund and any work-related bonuses and begin to exempt potential tax returns toward the end of the year. They’ll also let you know if certain assets can’t be exempted, as both your attorney and the trustee will be reviewing the same tax returns to review your assets and see if you qualify for Chapter 7.

Let your attorney know about any annual bonuses that you expect. Even a bonus of $5,000 could add almost $1,000 per month to your monthly average if you don’t file at the right time.

Attorney Alec Solomita is a trusted, seasoned bankruptcy attorney serving Florida. Since 2007, he’s helped clients just like you determine if they qualify for Chapter 7, decide when to file, and move forward with a fresh start, free of debt.

Have questions about Chapter 7 bankruptcy, or in need of legal help? Reach out to Solomita Law, PLLC for an initial consultation today.

Can I Complete My Chapter 7 Bankruptcy 341 Meeting Before The New Year If I File In The Fall?

When you complete your 341 meeting doesn’t really matter; the only thing to plan for is when you file for Chapter 7 bankruptcy. Your 341 meeting is going to occur four to five weeks after your filing date, while the court is only going to look at what you received prior to the date you filed. They won’t generally look at what you receive after this date, with the exception of a tax refund.

Are There Advantages To Finishing Chapter 7 Bankruptcy Before The January Tax Season?

There are always advantages to filing well before tax season. Once you get into January, your entire tax refund will be the property of the bankruptcy estate. It won’t be a pro-rated portion. And when you do get your tax return, the trustee of the estate is going to want to know how you spent your tax refund. In their mind, that money belongs to the trustee and should go to your creditors.

The trustee will ask what you spent that money on. Did you spend it on plastic surgery, for example? Did you buy something you wanted, but didn’t need?

This makes the first three to four months of the year a bit of a balancing act. You don’t want to lose your refund, but on the other hand, you don’t want a trustee to be irritated with how you spent your refund. It can become complicated, and speaking with a bankruptcy attorney well ahead of time is best.

How Can A Bankruptcy Attorney Help Me Get Ahead Of Year-End Financial Stress?

In the past, bankruptcy filings were often reduced once the Thanksgiving season rolled around. Today, for many families, holiday stress sometimes highlights how much debt they are truly in and pushes them to file.

While you can legally file at any time of the year, your tax returns are more relevant for the next year. Still, it’s important to remember that the biggest factor to consider isn’t when you file, but rather if your income level qualifies you for Chapter 7 to begin with.

Still Have Questions? Ready To Get Started?

For more information on Chapter 7 bankruptcy in Florida, an initial consultation is your next best step. Get the information and legal answers you are seeking by calling (407) 300-1082 today.