Should I File for Bankruptcy?: Top 10 Reasons it’s Time to File
“Should I file for bankruptcy?” This is a question that many people find themselves facing, but few know the answer to. Read on to learn the top ten reasons it’s time to file for bankruptcy.
Are you going through a divorce?
Are you having difficulties making payments?
Is your house in foreclosure?
If you answered yes to any of these questions, your financial life might be in a mess. In fact, you’re even considering filing for bankruptcy. But, there is one question you need to ask yourself: should I file for bankruptcy now?
If so, you might not be sure why now is the right time. Don’t know how to figure it out? We’ve you covered.
We’ll give you 10 reasons why it’s the right time to file bankruptcy. Read on to learn more!
Should I File for Bankruptcy Now?
Deciding that you’re going to file for bankruptcy is a difficult decision to make. It doesn’t matter if you’re single or the head of a family of 4. There are different types of bankruptcy you can file.
You can file Chapter 7 or 13. The type of bankruptcy you’ll file will depend on your situation and needs.
Chapter 7 is known as the straight bankruptcy. This type of bankruptcy discharges most of your debt. This chapter liquidates your assets to pay your debt.
You might think Chapter 7 will help you get rid of all your debts. Yet, not all debts can be discharged under this bankruptcy. After the bankruptcy is over, your debt will go away, but you’ll owe a balance.
This chapter is available to individuals and businesses. For this type of filing, you’ve to meet specific requirements. An attorney can give you more information about you meeting them.
Another filing option you’ve available is Chapter 13. This filing is also known as the reorganization bankruptcy. This chapter lets you pay off your debt in three to five years.
If you’ve consistent income, this bankruptcy can work as a grace period. At the end of the bankruptcy, the debtors keep their property.
We recommend you consult a bankruptcy attorney to make an informed decision. Also, they can give you a better idea of what type of bankruptcy is the best option for you.
Before you sit down with your bankruptcy attorney, you should know why you should file for bankruptcy so you can make an informed decision. Here are 10 reasons why you should file bankruptcy right away:
1. Is Your Lender About to Repossess Your Car?
So your financial situation has led you to fall behind on your car payments. It’s difficult for you to get caught up. Your lender is contacting you about your payments, and you can’t see the light at the end of the tunnel.
If this sounds familiar to you, filing for bankruptcy now can help you. When you file for bankruptcy, an automatic stay is placed on your assets. This means that the lender has to stop contacting you and trying to collect the payments.
Chapter 7 will give you a temporary stay that can help you get caught up on your payments. In contrast, a Chapter 13 filing can let you include these payments in your plan.
2. Is Your Landlord Trying to Evict You?
If your landlord is evicting or trying to evict you filing for bankruptcy can help. These filings can put a stop on most evictions. You’ll have to make the monthly payments you’re behind, but it can give you some time to catch up.
Bankruptcy won’t help in all cases. If the landlord has a possession judgment, filing bankruptcy won’t help. An attorney can give you a better idea of what applies in your case.
3. Is Your House in Foreclosure?
If your house is being foreclosed, filing for bankruptcy can put an automatic stay on those payments. When it comes to Chapter 7, it won’t help you unless you get caught up on your payments fast.
When it comes to the mortgage after bankruptcy, Chapter 13 will let you get caught up on your payments during the process. Either chapter can help depending on your case.
4. Is There a Lawsuit Against You?
Filing for bankruptcy can help stop lawsuits against you. Yet, it doesn’t ban all lawsuits. So if you decide this is why you’re going to file bankruptcy make sure it will stop the lawsuit first.
5. Did You Start on a Higher Paying Job?
If you want to qualify for Chapter 7, you’ve to pass the means test. They analyze your income for the last six months. So if you just started earning more income, you should consider filing bankruptcy sooner than later.
6. Are You Expecting to Get Property Soon?
If you’re expecting an inheritance or another type of property, you should consider filing bankruptcy soon. Then your date of filing will be earlier than the date you receive the property. You should consult a bankruptcy attorney before to make sure you can keep the property you’re receiving.
7. Did You Move to Another State with Different Exemptions?
The property you can keep will depend on the state exemptions. Since your exemptions are based on your domicile, if your previous state is more favorable you should consider filing soon. This way you make sure your prior domicile exemptions apply to your bankruptcy filing.
8. Are You Going Through a Divorce?
If you’re going through a divorce, and your finances were in a tough place before it. It may get worse during and after your divorce. You may consider filing your bankruptcy so it can be easier for you to maintain your lifestyle.
9. Did You Lose Your Job?
Losing your job is something out of our control. If this happens to you and your bills keep piling up. You dig a hole on your emergency fund and don’t see many options.
You might consider filing for bankruptcy. Because your job loss won’t send away your creditors.
10. Do You’ve Medical Debt That’s Undermining Your Finances?
You may not believe it, but this is more common than you may think. Suffering a disease or accident all of a sudden isn’t predictable.
You might end up with a huge bill. Staying on top of your bills might be difficult. You should consider filing for bankruptcy, in this case, to make it easier for you and your family.
Wrapping It Up
You might be asking yourself, should I file for bankruptcy now? Yes, filing for bankruptcy now is as good as any time. Before making the jump, we recommend you consult a lawyer. They can give you a better idea of the process and possible outcome.
Want to learn how you may be able to dig your family out of bankruptcy?
Check our article on how to get your family out of debt.