People who've never filed for bankruptcy before often wonder about the timing of the process. A bankruptcy attorney will typically tell a prospective client that filing sooner is almost always better. However, you might wonder why that is.
Debts rarely get better with time, and the best move is usually to get them under control as soon as possible. People who are seeking discharges through Chapter 7 liquidation often don't have enough assets to justify the additional stress of months or years of waiting to file. Likewise, folks who are restructuring their debts through Chapter 13 are almost always going to be further ahead to start paying their debts on new terms as soon as possible.
Notably, holding off on filing can create an opening for claims that a debtor did it intentionally to cram more debt into the bankruptcy. Particularly aggressive creditors may ask the court to strike down a request for bankruptcy on these grounds. A bankruptcy law firm will normally advise you to proceed with a petition for relief as soon as you can get the paperwork and supporting documentation ready. This reduces the risk that a creditor or judge might misinterpret your actions.
Opening Additional Bankruptcy Options
It is possible to file a Chapter 7 petition for part of your debts, obtain a discharge, and then file for Chapter 13 to restructure the remainder. A bankruptcy attorney may unofficially call this a Chapter 20 filing since that's what the numbers in the two filings add up to. This process takes more time than just filing for either one individually, and you won't have the option of restructuring until you wrap up the Chapter 7 case. Also, it's wise to involve the court from the start of the Chapter 7 petition so the judge can follow your intentions and not unnecessarily close the door on any options for you.
When to Slow Down
A bankruptcy law firm will encourage you to pump the brakes a bit early in the process. This is mostly for the sake of thoroughness. They will want to verify that all of the information for you and your creditors is correct. Likewise, they'll check the petition for completeness since you don't want to leave anything out.
Once a bankruptcy attorney is comfortable with the petition, though, you can file. Be aware that the process moves fast. The court will want all paperwork in within a couple of weeks. Likewise, it will schedule proceedings within several weeks and try to reach a determination within a few months at most.