When is the best time to file bankruptcy?

There are several factors to take into account when timing your bankruptcy filing.

Taxes:
An income tax refund is an asset which can be turned over to your creditors. If you anticipate a tax refund, the best time to file your bankruptcy petition is after you get your refund and spend it on reasonable and necessary expenses.

Wages:
In Colorado, 25 percent of your wages are non-exempt from your creditors. This includes wages that your employer owes you on the day of your bankruptcy filing. While we think is law should not apply to individuals it does.

If you're paid once a month, for the previous month, and you were paid a week ago, your employer owes you a week's worth of wages. The best time to file your bankruptcy is as soon after you're paid and can use the money to pay your bills.

Inheritance / Gifts:
If you receive an inheritance within six months before or after your bankruptcy filing, it will be an asset that can be turned over to your creditors. Again, the solution is to get your inheritance and wait six months. Meanwhile, spend the money on reasonable and necessary expenses.

Other Issues:
The bankruptcy code is complex. There are many other factors involved in timing your filing. You need to talk to your Circle Law attorney.

Circle Law can help you review your financial circumstances and determine whether bankruptcy may be an option for you. Contact Circle Law.