The holidays are right around the corner, which means many people will be frequenting more shops and restaurants as they prepare for their various festivities. If you’re out buying gifts, stocking up on cookie-baking supplies, or meeting friends for celebratory nights out, you’re probably also seeing an increase in your credit card bills. For those who are already dealing with huge debts, the holidays can be especially stressful. In fact, you may be considering filing for bankruptcy as a way to find some relief from your debt. If so, you may wonder if you should file for bankruptcy before or after Christmas.
The Jolly Side of Filing before Christmas
A Chapter 7 bankruptcy discharge wipes out the majority of your debt, giving you a fresh start. It also frees up your cash in as little as four months. Since you will no longer be putting your whole paycheck towards your bills, you can use some of your funds to pay for presents or other holiday treats.
If you decide a Chapter 13 bankruptcy is right for you, you’ll still owe money on your debts, but you will likely be paying reduced amounts due to negotiations with your creditors to lower the interest rates or amounts owed. Once again, this puts less stress on your wallet, so you could have some extra spending money to put towards your festivities.
The Grinchy Side of Filing before Christmas
It’s true that bankruptcy can provide financial relief. But for those who have a small income, it may not free up that much money. If you don’t have enough extra cash and you decide to rely on credit cards, things could get tricky. Some credit card companies may not want to give you a card when you’re fresh from a bankruptcy discharge, especially since your credit score will be lower. Those that will give you credit may limit the amount they give and will probably charge very high-interest rates.
Another concern you may have is that you don’t want to wind up back where you started. If you just received a bankruptcy discharge, you don’t want to turn around and hurt your credit even more by racking up credit card bills you can’t pay. That’s not to say you shouldn’t spend a single cent. Rather, you should be mindful of what you spend and try to keep costs to a minimum. That way, you can pay your credit card balances in full each month and avoid getting back into a vicious debt-building cycle.
What about Filing after Christmas?
There are definitely some advantages to filing after Christmas. Filing for Chapter 7 will allow you to discharge much of your unsecured debt, so your credit card bills will likely vanish. While Chapter 13 does not get rid of all debt, it will give you the chance to negotiate lower interest rates on your credit cards and allow you to pay them off in a shorter period of time.
Call a Cleveland Bankruptcy Attorney
You’ve decided that filing for bankruptcy might be the best way to dig yourself out of debt. The question of when to file can be just as important, and talking to a well-versed bankruptcy attorney may provide you with the information you need to make your decision. The attorneys at Luftman, Heck & Associates will go over your options and help you determine the best decision for your unique situation.