If you’re filing for a Texas bankruptcy to regain control of your finances, consider waiting until your financial situation stabilizes before taking action. When filing for a Texas bankruptcy, timing is everything and waiting a few weeks could completely transform your fiscal life. Pre-emptively filing for a Texas bankruptcy could spell doom if your finances are still volatile, as additional debt could be created after the bankruptcy.
When to File for a Texas Bankruptcy
When you meet with your bankruptcy attorney, it’s crucial to fully disclose the details of your financial life, including expenses, income, and debt. By fully understanding your situation, you’ll know when it’s the right time to file for a Texas bankruptcy. Here are a few situations where you’ll benefit by waiting to file:
You’re about to incur additional debt. If you’re going to have more debt within a few weeks, it’ll be better to wait to file for a Texas bankruptcy. However, this is only true for “legitimate debt,” such as medical expenses. Frivolously shopping and putting it on your credit card with the intention of discharging it is considered fraud.
You just lost your job or your income sharply dropped. In order to file for a Chapter 7 Texas bankruptcy, you must pass the means test to prove your eligibility. If you file for a Texas bankruptcy too soon after your income dropped, the average of your income over the previous 6 months might be too high and you might only be eligible for a Chapter 13 filing instead. In order to qualify for a Chapter 7 bankruptcy, be sure to wait to show that your income has significantly decreased.
You recently made a luxury purchase. If you intend to file for a Chapter 7 Texas bankruptcy but have recently made a luxury purchase, such as a new computer, HD television, or clothes, it’s best to wait 90 days before filing. Luxury purchases made immediately before a Chapter 7 filing are sure to raise eyebrows concerning your Texas bankruptcy intentions.
By discussing your entire financial situation with your bankruptcy attorney, you’ll better understand when it’s best to file for a Chapter 7 or 13 Texas bankruptcy.