December tends to be the slowest month of the year for bankruptcy attorneys. Most bankruptcy candidates want to focus on their family and friends during this time of year, not their financial woes. Others simply cannot carve out any time to see an attorney during the hectic holiday season. Some, however, believe that they should wait to take advantage of the opportunity to wipe out debts that have arisen from holiday gifts or to pay for holiday expenses. This may sound like a great idea, but these debts may fall under one of the exceptions to discharge.
Section 523 of the Bankruptcy Code dictates that “consumer debts owed to a single creditor and aggregating more than $600 for luxury goods or services incurred by an individual debtor on or within 90 days before filing” and “cash advances aggregating more than $875 that are extensions of consumer credit under an open end credit plain obtained by an individual debt on or within 70 days before filing” are presumed nondischargeable. If a debt is nondischargeable, it will not be legally erased and will survive the bankruptcy. Needless to say, creditors and bankruptcy trustees may be very interested in how you “spent” your holidays.
December is also the time of year when many employees receive a holiday bonus or year-end bonus. This generous gesture may artificially inflate the income the Court uses to determine what chapter of bankruptcy is most appropriate. Cash gifts from well-meaning relatives may also impact your “income”. This could be the difference between being debt free in a matter of months to waiting five years for your fresh start.
If you are struggling financially, it is important to take time out of your busy holiday and schedule a free consultation.