Should I file bankruptcy before or after the holidays?

The holiday season can be a time of joy, but it can be stressful as well. After all, it often means an increase in spending on food, gifts, travel and more.

If you are already facing significant debt and financial difficulties, it can cause even more stress. This can lead many to wonder when they should seek debt relief: before or after the holiday season?

Three issues to consider to determine when to file

Unfortunately, there is no single answer to that question. As with many things, it depends on each individual situation. Even so, there are a few things to consider when it comes to finding the right time to file bankruptcy, including:

• Spending: Spending money and possibly accruing more debt before or during bankruptcy can be complicated. If it is not for necessities, new debts might not be dischargeable in bankruptcy. Creditors might also dispute discharges for such debts. Therefore, spending on gifts and travel or other luxuries could make the process of obtaining debt relief more complex in the long run.
• Earning: It is not uncommon for people to receive holiday bonuses or even gifts of cash from family members during the holidays. Bonuses from work are classified as supplemental income and could affect eligibility to file Chapter 7 bankruptcy.
• Timing: The timing of bankruptcy is always a critical factor. Holidays can impact the timing for you on a personal level, but also on a technical level. They can affect the actual process of bankruptcy. If the federal government recognizes holidays – like Christmas, for example – then federal and state offices or courts in New Mexico might not be open or available to process documents or meet important deadlines.

These factors and the time around the holidays can complicate the decision of when to file bankruptcy. That is not to say it is impossible. However, it is essential to evaluate your circumstances carefully and factor in these potential issues.

Planning is the key

While there is no definitive answer about whether before or after the holidays is preferable for filing bankruptcy, there is one thing for certain to understand: planning for bankruptcy is absolutely critical.

Of course, it is not an easy decision. The factors listed above can make it even more challenging. However, taking time to plan how you will move forward can help you overcome these challenges effectively and find the time that works best for you, your family and your finances to file bankruptcy.