The holiday season can be stressful but adding the burden of debt and financial issues can be too much to bear. If your debt has put a toll on you, you are probably considering filing for bankruptcy. Our Fort Lauderdale bankruptcy attorneys explain whether you should file for bankruptcy before or after the holidays.
Making Purchases During the Holidays
Bankruptcy laws are strict when it comes to making luxury purchases before filing for bankruptcy. Bankruptcy law states that any consumer debts owed to a single creditor over a certain threshold for luxury goods or services are presumed to be non-dischargeable debt. This means that if you purchased gifts or holiday items on your credit card, those purchases may not be eliminated through bankruptcy. The only exceptions are the items purchased that are deemed necessary.
Means Test & Holiday Bonuses
Another thing to consider is the completion of the means test. If you want to file for Chapter 7 bankruptcy, you will need to take the means test. The means test will find whether an individual or family is eligible for bankruptcy by determining if they are below the average income in their area. The means test will essentially consider child support, lottery winnings, and even holiday bonuses. For such reasons, people like to file before receiving a holiday bonus to ensure that it doesn’t count on your means test.
Filing for Bankruptcy During the Holidays
If you are already struggling with debt and haven’t even started purchasing for the holidays, you might want to get started on your bankruptcy case. Filing for bankruptcy before the holidays will allow you to have peace of mind, knowing that your financial situation is being resolved. You can also get a head start and practice financial management and budgeting during the holidays. Limiting your purchases and focusing on repairing your debt may be the best holiday gift yet.