How to know whether it is the right time to declare bankruptcy

How to know whether it is the right time to declare bankruptcy

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There’s no denying the fact that the pandemic has adversely affected several million people. However, you needn’t fret as there are still ways in which you can rejuvenate your financial future and start afresh. If you choose to file for bankruptcy, you can eliminate numerous bills, not by raiding your retirement accounts, but by dissolving them for good. 

Are you confused about whether or not it is the right time to file bankruptcy? If you’re not sure about your financial situation, we’re here to help you out. As per the Law Offices of Scott J. Goldstein, there are various types of bankruptcies and each of them has its own implication. Keep reading. 

Situations when it is better to delay bankruptcy

Now that you don’t know when to file bankruptcy and you’re looking for suggestions, let us guide you on when not to file bankruptcy. Here are a few situations when it is better to delay the process. 

When you have a chance of modifying your mortgage

There are several among us who plan to file bankruptcy in order to forestall foreclosure. Though bankruptcy offers a good alternative, many people file a little too early than what they need. This makes it almost impossible for them to apply for a mortgage modification. As soon as you file bankruptcy, mortgage lenders will become unwilling to enter into mortgage negotiations with you. So, if you wish to seek a mortgage modification, you might avoid bankruptcy. 

When there is a sudden hike in your income

Suppose you file a Chapter 7. The court will instantly take a close look at your finances to determine whether or not you’re eligible for the means test. If they find your income to be too high, you can only file Chapter 13. However, if there is a sudden hike in your income lately, you might consider delaying bankruptcy. 

When you predict taking on new debts very soon

If you predict other noteworthy expenses in the near future and you’re sure about taking on more debt, you should not file bankruptcy anytime son. Chapter 7 has a general rule of eliminating all debts that you owe on the date of filing. However, the other debts that come along later will be yours and hence you have to handle them. For instance, if you’re planning to have a costly cosmetic surgery done next month and you’ll have to bear the expenses, don’t expect those expenses to be wiped off through Chapter 7. So, if you’re someone who is ready to tackle your new debts, you should be careful with them.

Filing bankruptcy is always a tough decision as there are several legal implications. If you’re not sure about the steps to take and when to take them, you should get the help of a bankruptcy attorney. Make sure he is experienced enough and has your best interests in mind. Don’t get intimidated by making the decision of filing bankruptcy as there are benefits of this process too.

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