While the holiday season is typically thought of as a joyous time of family gatherings and giving thanks, this time of year can be particularly stressful for those who are struggling financially. In many cases, individuals who are overwhelmed with debt feel unsure whether they should file for bankruptcy before or after the holidays have passed. If you are considering pursuing bankruptcy as a means of achieving a fresh financial start, it is important you consider the following factors to determine the most appropriate time to file.

Holiday Purchases May Not Be Dischargeable

Some people choose to wait until the first of the year to file for bankruptcy to take advantage of the opportunity to eliminate debts that arise from holiday gifts or other expenses. While this may sound like a great idea, these debts may actually be excluded from discharge.

Large credit purchases and cash advances within 90 days prior to filing for bankruptcy are oftentimes non-dischargeable and may even cause creditors to accuse you of fraud. If found guilty of fraud, your entire bankruptcy filing could be rejected. Since your creditors will scrutinize your pre-bankruptcy spending, it is recommended you avoid the temptation to overspend by filing for bankruptcy before the holiday season even begins.

Cease Creditor Harassment

The last thing you need to deal with during the holiday season is overbearing collectors constantly calling you and disrupting your time with your family. Collection calls and threatening messages can really be a downer during the holidays and cause you to feel immense pressure. Immediately upon filing for bankruptcy, however, a court injunction known as an “automatic stay” will go into effect requiring all creditor communications to cease. Not only can this help you enjoy the holiday season with less stress, but it can also give you much-needed space to step back and reorganize your finances.

Bonuses and Monetary Gifts

December is also a common time for employees to receive year-end bonuses or cash gifts from relatives. Unfortunately, these gifts may artificially inflate your income and impact the chapter of your bankruptcy filing the court deems appropriate. Depending on the circumstances, this could potentially mean the difference between receiving a quick discharge of your debts and having to wait a period of five years to achieve a clean slate.

Our Richmond Bankruptcy Lawyer Can Help

If you are tired of being bogged down by debt, our team of top-rated Richmond bankruptcy attorneys at Bruce W. White, P.C. can help you find a custom-tailored solution for your financial struggles. Having represented countless individuals, families, and small business owners since 1980, we can provide the powerful advocacy you need to help you get back on track towards a debt-free future.

Call (804) 655-0502 or fill out an online form today to discover your legal options.