It is tax time again. For many people that means that it is time for a Florida vacation, a new car or some other luxury item that they have waited to splurge on. Others wait until tax time to pay off small debts which they couldn’t catch up on during the year. For some, however, tax time means that they will be filing for Chapter 7 bankruptcy.
After studying statistics over the last four years, researchers have discovered that there is a spike in the number of people filing for bankruptcy each year. This spike takes place during the spring, right at tax time. In fact, the percentage of people who filed for Chapter 7 bankruptcy in March 2017 was 26 to 34 percent higher than that of the monthly averages in past years. Bankruptcy court records show that filings in April were up from 15 to 25 percent.
Why are people filing at tax time? According to the report, using their tax refund to file for Chapter 7 bankruptcy is a great way to get out from under crushing debt. While people often use their refunds to catch up on mortgage payments and bills, they may have fallen too far behind for their taxes to do any good. In those cases, using the refund to pay the expenses for a Chapter 7 bankruptcy is a good idea.
In Florida, bankruptcy is usually filed by those whose debt has become too much for them to reasonably expect to catch up. Items such as credit card debt, medical bills, or rent that is past due can all be wiped away with a Chapter 7 bankruptcy. For those who are thinking of filing, an experienced bankruptcy lawyer can help explain the process and guide the client to file the paperwork needed to get out from under his or her debts.
Source: foxbusiness.com, “When a tax refund means bankruptcy“, March 30, 2017