This is a good question to ask, because the answer depends on your situation.
You need to consider your tax refund. Sometimes clients don’t have a job or haven’t had a job for some time. In this situation, this question is relevant. However, if you do have a job and you are expecting a refund you will need to weigh the benefits of filing now and losing all or a portion of your tax return versus the benefit of filing now. If you have a creditor on the verge of garnishing your wages or selling your property you will likely need to file now unless your expected tax refund will outweigh the lost wages or property. The trustee is allowed to take 1/12 for every month before you filed. For example, if you file your bankruptcy in September, 2011, the trustee will require you to turn over the money from the next year’s tax refund that you get in the Spring of 2012. However, the amount the trustee can take would be 8/12 of the tax refund.
The next factor to consider is whether you will lose property to the trustee in the bankruptcy. For example, if you have some non exempt property, you may try to sell it before filing (there are restrictions on doing this though and you should consult an attorney before trying this) so the trustee doesn’t take it.
Arnold, Wadsworth & Coggins Attorneys is a law firm that files bankruptcy for clients and serves clients in Salt Lake City, Ogden, Layton, Kaysville, Farmington, Draper, South Jordan, West Jordan, Sandy, Murray, Meridian, West Valley City, Bountiful etc.
