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When is the best time to file bankruptcy?

mousetrap.jpgOur Tampa, Florida bankruptcy law firm is small enough that we are able to help time our clients’ bankruptcy case for maximum results. Without proper timing, a bankruptcy can feel more like a trap than a remedy for financial ills. We are often able to save our clients several hundred dollars a month by simply correctly timing their case. A high volume mill firm won’t do this, their business model is based upon touching their clients’ files a minimum number of times and getting it filed asap.

However, the timing can be critical. Both in terms of assets that our clients can keep and the type of case or relief they qualify for. Most of our clients have something to lose. Our goal is to help ensure they come out ahead when their bankruptcy is filed.

Simple things to keep in mind. It is not wise to file a bankruptcy if you anticipate large expenses in the future, such as an upcoming surgery where there could be uninsured medical costs. It will be another 8 years before you can file Chapter 7 again so choose your timing wisely.

If you are about to let your house go and rent an apartment or house, please consult with a bankruptcy attorney before you move. This is huge. The IRS rental allowance under the means test is usually inadequate and very low. Unless you are able to use your mortgage expenses you may not qualify for a Chapter 7. Here in the Middle District of Florida, we prevailed on a Motion to Dismiss brought by the U.S. Trustee last year in one of our Chapter 7 cases where our client was allowed to count his nearly $1 million mortgage even though he was surrendering the house (a possible modification was in the works at the time as well). Had he already moved out, this would not have been possible.

There are too many timing issues to discuss here. These are just two small examples. It is important to consult with and use a qualified bankruptcy attorney for optimum results.

Christie D. Arkovich

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