April 26th - What Do Bankruptcy And Your IRS Refund Have In Common?

“Bankruptcy Season” And When To File For Bankruptcy

Today’s chat with Boca Raton real estate agent Terry Story begins with an article she gave to Steve titled “Distressed Homeowners: It’s Bankruptcy Season.”  Terry says she’d never heard of such a thing as “bankruptcy season” and was baffled at first to learn that it occurs “at the same time as March Madness.”  It turns out that many people in dire financial straits wait until this time of year because they plan to use their tax refunds to hire an attorney to help them file bankruptcy.  While acknowledging that some folks really can’t afford an attorney without a windfall (tax fund or otherwise), Terry feels that this is probably not a great reason in itself to file Chapter 7 bankruptcy and that, instead, it should be considered when someone is struggling badly and overwhelmed by debt.  To put some numbers to this situation, Terry argues that if your debts—whether medical, credit card, or high-interest loans—are equal to or more than 50% of your annual income, or you can’t see any way of paying off all your debts within the next 5 years, or your debts are interfering with other parts of life like the need for a new car or to save for retirement, you should seek professional guidance from an accountant or attorney.