Since I started my bankruptcy practice back in 1992, I have noticed a marked decline in new clients signed in December and January. I have long suspected it is because people are either in denial (shocked back to reality in January when the credit card bills come in with all those gift charges) or they want to have "one last Christmas" before filing. Whatever the reason, putting off the inevitable like this is not a good idea.
The reality is, whether you choose to believe it or not, you are just as insolvent before the holidays as after, and use of those credit cards while insolvent can cause you a problem in bankruptcy, and maybe even result in those debts not being discharged.
Why is Waiting Bad?
Look at it from the creditor's perspective: you used your credit cards for non-essential purchases (those holiday gifts) while planning to file bankruptcy in the future and wiping out that debt. This may well cause the creditors to object to the discharge of that holiday debt based on fraud and, depending on how much you spent, that can be a rather large amount.
So What Do I Do?
The best advice I can give is to deal with the situation now, and not put it off. Whether you actually file before or after the holidays, tighten your belt now on gift giving, using cash or a debit card. Here are some tips on how to do that.
Remember also that life post-bankruptcy, at least for awhile, is life without credit cards, so you might as wll get used to it now as later. Put contacting my office for a free consultation on your holiday to-do list. You will thank yourself later.
Can You Help?
If you live in South Jersey and are considering filing bankruptcy, call my office at 856-432-4113 or contact me through this site for a free consultation to discuss your case.
If you are looking for more information about bankruptcy, then download my free book,Top Questions People Ask About Filing Bankruptcy in New Jersey.