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4 Reasons Not to Delay Your Bankruptcy Filing—and One Situation where It Makes Sense


Far too many people struggle for years with mountains of debt, living under constant stress and not getting ahead financially. In truth, many debtors wait far too long before filing for bankruptcy and would have been better off had they filed sooner.

As seasoned Plantation bankruptcy attorneys, we encourage distressed debtors to meet with an attorney as soon as possible to decide their best course of action. And if bankruptcy is their best move, then they should typically run, not walk, to the courthouse to file for protection.

You’ll Hurt Yourself Financially if You Wait

There is no reason to continue to pay debts that are dischargeable in bankruptcy if you do not have the funds to do so. One situation we see often is a debtor who raids their retirement accounts to pay credit card or other debts, which is a massive mistake. Unfortunately, you will not get that money back once it is gone, and you’ll probably pay a penalty on the early withdrawal. There is no reason to compromise your retirement to pay off a credit card.

By filing for bankruptcy sooner rather than later, you don’t waste money on dischargeable debts. Instead, you can use that money to pay debts you can’t discharge, like your home mortgage, unpaid child support, or other expenses.

Collection Efforts will Increase

Once you file, the automatic stay will halt all collection efforts, including calls from collection agencies. If you wait, these entities can redouble their efforts and hound you day and night. For peace of mind, filing as soon as possible makes sense.

You Might Not Qualify for Chapter 7 if You Wait

Chapter 7 is much easier than Chapter 13, but it is reserved for those without the disposable income to pay back their debts. To qualify for Chapter 7, you’ll need to pass a means test which compares your income to the median income in Florida. If you wait, then your income could rise, and you might no longer qualify. There are alternate ways to qualify for Chapter 7, but waiting could harm your chances as well.

You Might Make a Mistake if You Wait

It’s never a good idea to do any of the following in the months before you file for bankruptcy:

  • Buy too many luxury items
  • Transfer property or cash to family members
  • Favor one creditor over another by paying that creditor extra

If you wait to file for bankruptcy, you increase the chances that you make one of these mistakes, which can throw a wrench into your bankruptcy.

One Sensible Reason to Wait

There are a few situations when waiting to file is the right move, and here is one: you own a home in Florida but only recently arrived. Typically, Florida’s homestead exemption allows someone to exempt the full value of their home, provided it is their main residence. But if you only moved to Florida in the past 1,215 days, then the maximum you can exempt is set by federal law (which in 2019 was $170,350).  By waiting, you might preserve a substantial amount of equity in your home.

Every debtor’s situation is different, so obtaining individualized advice is key. Nowack and Olson, PLLC has helped many consumers like you get out from under debt. Contact us today, 888-813-4737, to schedule a free consultation.




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