Consider the Timing before You File for Bankruptcy in Arizona

When you file for bankruptcy in Arizona, the main objective is to relieve an unreasonable debt burden and get back on your financial feet as quickly as possible. While it can be true that sooner is better than later, that is not always the case. The right timing to file for bankruptcy takes into consideration many factors.

File for Bankruptcy Later
You might wait to file for bankruptcy until the foreclosure on your home is certain or you are near to being evicted.

You might also delay your bankruptcy filing if you need to engage in legitimate pre-bankruptcy planning to optimize exempt assets. In this situation it is especially important to consult with bankruptcy lawyers because exemption laws are complex and, in Arizona, they are expected to change later in 2013.

Certain types of tax debt, such as an older tax debt about to qualify for discharge, could be a reason to wait to file for bankruptcy. Likewise, if you expect a tax refund you might want to receive and spend it before you file for bankruptcy. But you should only use the tax refund for reasonable and necessary expenses including food, housing, and paying the costs associated with bankruptcy in AZ. Do not use the tax refund to pay creditors or buy items that will not be exempt in a bankruptcy. Legal advice from an experienced bankruptcy lawyer can help you understand these considerations.

File for Bankruptcy ASAP
To stop a garnishment, eviction, collection activities, or disconnection of utilities, file for bankruptcy quickly. The bankruptcy filing results in an automatic stay that will stop these proceedings. The automatic stay will also freeze collection harassment and repossession attempts.

Particularly for chapter 7 bankruptcy, you should file for bankruptcy quickly if your income recently increased significantly. The longer you maintain the higher income, the more likely it will affect your ability to pass the chapter 7 means test, which is a concern unless more than 50% of your total debt is business related.

There are advantages and disadvantages to filing bankruptcy sooner or later. Since each case is different, there is no substitute for legal advice during the bankruptcy process. Radix Law, in Phoenix and Scottsdale, AZ, has lawyers with decades of experience helping individuals and businesses understand when filing for bankruptcy would be most beneficial.

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