There are times when delaying bankruptcy can provide significant benefits. This could be particularly true if there have been recent changes in your life such as relocating to another state or losing a job. If you are trying to figure out the right time to file for bankruptcy, keep reading to learn some instances where it would be best to wait.

Maximizing Your Debt Discharge in Bankruptcy

1) Have you recently moved to another state? Then you cannot claim that state's bankruptcy exemptions until you have been a permanent resident there for two years. So compare your old state's exemptions to your current state's options. If you could save more of your property through your new state's exemptions, then you may want to sit tight until you qualify to file under those bankruptcy laws.

2) Did you recently experience an income change? Your income is the main focus of the means test, a test that affects both Chapter 7 and Chapter 13 filings. If your income has just been seriously reduced, then you may want to wait six months before you file. This is because the income that gets plugged into the means test is your average income during the six months before you filed. The lower the income you can put on that test, the better chance you have of qualifying for Chapter 7, and the fewer unsecured debts you'd have to pay off in Chapter 13.

3) Want to cram down your car loan in Chapter 13 bankruptcy? In order to decrease the amount you would have to pay back on your car, you will have to have ownership of the car for a minimum of 910 days, roughly 2.5 years. If you can wait to file for bankruptcy, you might want to do so in order to lower your car loan repayment.

4) Do you have old tax debts? You can only discharge some of your back taxes if this debt is from a long time ago. Talk with a bankruptcy lawyer to see if waiting to file would qualify you for a tax debt discharge.

5) Do you have more medical bills on the way? One of the top reasons people file for bankruptcy is medical debt. If you expect that even more medical bills are headed toward you, then you may want to put off bankruptcy until you can ensure all of your medical debts will be wiped out.

6) Are you waiting on a tax refund? Then you should probably wait to file for Chapter 7 bankruptcy until you have received the refund and spent it. Even if your refund hasn't reached you yet, if you file for bankruptcy, the trustee could put your entire refund toward paying off creditors. You wouldn't see a dime. If you wait, however, then you can get your refund and use it all on daily costs.

Avoiding Accusations of Bankruptcy Fraud

7) Did you recently pay off a personal loan from relatives or friends? Then if you file for bankruptcy right now, the trustee could take that money away from your preferred creditors, in order to distribute that payment among all your other creditors. Unfortunately, this could mean that the trustee sues your family or friends to get the money back. If you have made a "preferential transfer" within 90 days of filing for bankruptcy, or even within a year of paying off friends and family, then the trustee could take those payments back. You should probably wait to file for bankruptcy.

8) Did you just get a cash advance or use your credit card? It is fraud to create a debt you never mean to repay, so if you get an advance or use a credit card right before you submit bankruptcy paperwork, the trustee or your creditors could accuse you of fraud. And credit card companies are likely to do this, because they know that unsecured debts such as credit card debts do not often get paid back in a bankruptcy. Talk to a bankruptcy attorney about how long you should wait.

9) Did you just transfer ownership of property? Purposefully putting property under someone else's name to exclude that property from bankruptcy is fraud. If you transferred property before a bankruptcy filing, creditors could be suspicious. They could accuse you of trying to hide property from the trustee. In such a case, you could face criminal charges, and the trustee might try to take that property back. Discuss your case with a bankruptcy lawyer to see if waiting to apply for bankruptcy could avoid this misunderstanding.

Learn what timing might be right in your unique case when you speak to a bankruptcy lawyer today!