Depending on your financial situation, filing for bankruptcy could be the best move for you. After making the decision to file, you need to determine exactly when you should. The timing of your bankruptcy could influence how well the process goes and whether or not you get the maximum benefits from it. 

Why Should You File Now?

The most important reason to file now is that when your documentation is filed, an automatic stay is put into place. The stay keeps your creditors from taking actions, such as filing for foreclosure or repossessing your assets. The stay usually lasts the time it takes for your bankruptcy to conclude. 

If you file now, with the stay in place, you can possibly negotiate with your creditors to take care of your debts while not losing your assets. For instance, you and your mortgage company can work on an agreement that allows you to keep your home while reducing your payments or dropping the interest owed and only paying the principal. 

Another reason to file now is that once you do file, assets that you acquire after the filing are protected from your creditors. If you buy a second home or car after filing, it is not considered part of the bankruptcy estate and is untouchable by your creditors. 

Why Should You Wait?

There are many reasons to wait to file and most of them have to do with the "look back" that is part of the bankruptcy policy. When you file for bankruptcy, the court will look back at your financial transactions during a certain period of time and determine whether or not you are eligible to file. 

For instance,  the means test in a Chapter 7 bankruptcy focuses on the income you have for the last six months. If you earn more than the income requirement, you could be forced to file for a Chapter 13 instead. 

This investigative period also takes note of any transfers of assets that you have made prior to filing for bankruptcy. If the transfers were close to the time you file for bankruptcy, you could face allegations of fraud. 

For instance, if you transferred property to your parents a month before filing for bankruptcy, the trustee could argue you were attempting to protect it from being taken. The trustee could not only allege fraud, but seize the property anyway. However, if you wait, you would not face those same allegations or risk the property being taken from your parents. 

A bankruptcy attorney can help you determine what is the best time to file based on your financial situation.