For the right individual, bankruptcy offers a second chance at financial freedom and a brighter economic future. But when it comes to the actual filing process, timing is essential, and when you file can have a direct impact on your case and its trajectory through the legal system. Filing around the holidays has some special considerations that someone thinking about bankruptcy should bear in mind; below, a few of these considerations are discussed in more detail.

Debts Accumulated 90 Days Prior to Filing Are Subject to Extra Scrutiny

The courts closely review the debts of anyone who pursues bankruptcy, but those debts amassed in the three months immediately preceding filing will be especially scrutinized. It's not unheard of for people to spend extravagantly in the months leading up to a planned bankruptcy because they hope they will ultimately not be responsible for the debt. So, if you file around the holidays and rack up exorbitant holiday shopping bills, it's going to send a red flag to the courts. And they may not allow any of those bills to be admitted as part of your bankruptcy—meaning you will be stuck with them.

The Holidays Can Also Impact the Type of Bankruptcy You File

Chapter 7 bankruptcy eliminates most kinds of unsecured debt. Chapter 13 bankruptcy restructures debt into a long-term repayment plan in the same vein as a debt consolidation would. There are income limits in place for Chapter 7 filers, meaning you cannot make over a certain amount of money if you want to file for Chapter 7. Around the holidays, many individuals receive holiday bonuses from work, and sometimes, these bonuses can be substantial. If you're expecting a large bonus, it may be enough to put you over the Chapter 7 limit, leaving Chapter 13 as the only viable bankruptcy option.

There Are Ways to Enjoy the Holidays During Bankruptcy

For those who do decide to file before or during the holidays, there are still plenty of ways to have a merry and festive season while simultaneously navigating bankruptcy. Keep spending to an absolute minimum, and if you must spend, pay with cash. Take your focus off material things. If you're creative, consider making homemade gifts. If you're a decent cook, prepare a meal for friends or family instead of making extravagant purchases. If there are children in the family, read them stories and spend time with them. The holidays don't need to automatically be equated with big-ticket purchases.

The relationship between bankruptcy and the holiday season is a complex one. If you're thinking about bankruptcy, let attorney Jeremy Bueker of the Bueker Law Firm help you determine the best time to file. For nearly 15 years, he has been representing Arkansas County clients in all aspects of bankruptcy. Call (870) 673-1313 or visit him online to arrange a free consultation.