For a lot of my clients, time is of the essence and they are generally literally running to my office to avoid wasting their house coming from a foreclosure sale. In their cases, it is possible to notice that you can’t wait to launch. However, for lots of my clients, it can be more advantageous for many years which they wait to file. In South Carolina, unlike most states, and we don’t have wage garnishment. Therefore, unless the debtor is experiencing foreclosure or even repossession, there usually isn’t an urgent need to produce by a certain date. Here are a few top reasons to wait to file.
1. IRS taxes. The general rule is the fact that income tax greater than several years old may be dischargeable should they meet some variables. Assuming your client filed punctually each year, it may be worthwhile to attend to file for as soon as the April 15th deadline to discharge an additional year.
2. The debtor has gotten a single time windfall of cash that couldn’t survive protected when they filed or bankruptcy. In this case, it might be worthwhile for your debtor when possible to wait until the funds are spent on necessities such as the mortgage, utilities, attorney, fees and daily living expenses.
3. Transfers of property or assets to loved ones or insiders within a couple of years just before filing. Bankruptcy law allows a look back amount of transfers or assets to family 2-4 years before the filing of bankruptcy. The reason for your vagueness in the 2 years is the place different Courts interpret the “Statute of Elizabeth” look back period. An example of this might be where a Debtor transfers property as part of his or her name to some loved one 1. 5 years ahead of declaring bankruptcy. In this example, the property has $50,000 in equity. In this scenario, declaring bankruptcy may be detrimental to the Debtor along with the transferee in the house. This reason behind this is the Chapter 7 could undo the transfer or make the transferee give the Trustee the equity inside your home. Waiting to produce bankruptcy on this scenario might be the best option
4. Generally, one from the few teams of clients that I see running into my office with an emergency Chapter 7 bankruptcy filing is clients with non-purchase money finance loans. Usually, these are loans the place that the finance company has a secured loan on the Debtor’s furniture or another thing for the home. Many times the Debtor has forgotten this until they obtain a “Claim and Delivery” lawsuit in South Carolina giving them 5 days to reply. In this case, it is imperative how the Debtor call me immediately to talk about options.