If you are unable to pay your debts, and your creditors are calling you all the time to get money from you, you may be considering filing bankruptcy. However, before you do, consult with a bankruptcy attorney to see if it might be in your best interest to wait a few months, or even longer, before starting the process. Here are a few reasons you might want to wait.
The bankruptcy court will require you submit documentation detailing your income for the last six months. If you have recently lost your job, or taken a pay cut, the average amount for those six months might be more than allowed to file for a Chapter 7. You may still qualify for a Chapter 13, but this will require you to pay off some of the debt. If your new income – of lack of – will not provide you with the money needed to make these payments, it would be in your best interest to wait until the average shows your inability to pay.
Property and Assets
There are probably going to be some property or assets that you really do not want to lose in the bankruptcy. Before filing, you can sell the property. Take advantage of any equity you have in it and use the proceeds to pay for necessities or to pay down some of the debt. This could include your home, vehicle, valuable items, or even your tax refund. You do not want to lose all that you have rightfully earned.
Purchases and Payments
If your debts show that you have purchased luxury items in the recent past, you may not qualify for a Chapter 7. In addition, if you do sell off some property and use the proceeds to pay down other debt, these payments may be recaptured to go into the funds to be used to pay all creditors equally. While it is good to have done this, you will want to wait the 90-days before filing so this money cannot be taken back.
Being unable to pay your debts is stressful and uncomfortable. Having to deal with creditors calling you at home and at work can be frustrating and embarrassing. While you might be tempted to start the proceedings to get everyone off you back, it might also be better to wait. Talk to an experienced bankruptcy attorney at a firm like O'Brien and Dekker Attorneys at Law to find out what will be best for you. Also, keep in mind that you can send a letter to request the creditors stop calling.