When Is the Right Time to File Bankruptcy?
If you are like many Americans, you may be wondering whether bankruptcy is right for you.
Many people resist the urge to contact a Bankruptcy attorney.
They feel as though even calling is an admission of failure.
Unfortunately, this delay often causes them to come out of Bankruptcy worse off than they might have otherwise been.
That is because in Bankruptcy, timing is very important.
The first thing you need to know about Bankruptcy is that if you live in a state like California, which provides bankruptcy debtors with generous exemptions, you may be able to go through the bankruptcy process and come out the other end with all of your possessions.
Why is this important? Because if you delay contacting an attorney, you may find yourself digging deep into your savings and retirement to keep yourself afloat.
It's natural to try and make it on our own as long as possible.
But if you contact an attorney as soon as you realize you are in for financial problems, you might be able to keep your savings and retirement money.
Most types of retirement accounts are entirely exempt in Bankruptcy.
Second, the date you chose to file in part determines what options you have in bankruptcy.
This is rather complicated, but the important thing to note is that your last six months of earnings are very important in a bankruptcy case.
Consequently, it may be important to file right after getting a job or for you to wait to file after losing your job.
If you file at the wrong time, you may find that you are not eligible for Chapter 7 bankruptcy.
Third, sometimes you may be better off waiting to file bankruptcy.
You can only receive a discharge in a Chapter 7 case every eight years.
Often, people naturally consider bankruptcy after losing a job.
But there is a problem.
In Chapter 7 cases, you merely get rid of your current debt.
This may help you if you are making significant debt payments.
But sadly, you will likely still be incurring living expenses in excess of your income.
In such a situation, you may actually be better off delaying bankruptcy until you find employment, and then filing for bankruptcy if you find that you are unable to make ends meet with your new job.
Many people resist the urge to contact a Bankruptcy attorney.
They feel as though even calling is an admission of failure.
Unfortunately, this delay often causes them to come out of Bankruptcy worse off than they might have otherwise been.
That is because in Bankruptcy, timing is very important.
The first thing you need to know about Bankruptcy is that if you live in a state like California, which provides bankruptcy debtors with generous exemptions, you may be able to go through the bankruptcy process and come out the other end with all of your possessions.
Why is this important? Because if you delay contacting an attorney, you may find yourself digging deep into your savings and retirement to keep yourself afloat.
It's natural to try and make it on our own as long as possible.
But if you contact an attorney as soon as you realize you are in for financial problems, you might be able to keep your savings and retirement money.
Most types of retirement accounts are entirely exempt in Bankruptcy.
Second, the date you chose to file in part determines what options you have in bankruptcy.
This is rather complicated, but the important thing to note is that your last six months of earnings are very important in a bankruptcy case.
Consequently, it may be important to file right after getting a job or for you to wait to file after losing your job.
If you file at the wrong time, you may find that you are not eligible for Chapter 7 bankruptcy.
Third, sometimes you may be better off waiting to file bankruptcy.
You can only receive a discharge in a Chapter 7 case every eight years.
Often, people naturally consider bankruptcy after losing a job.
But there is a problem.
In Chapter 7 cases, you merely get rid of your current debt.
This may help you if you are making significant debt payments.
But sadly, you will likely still be incurring living expenses in excess of your income.
In such a situation, you may actually be better off delaying bankruptcy until you find employment, and then filing for bankruptcy if you find that you are unable to make ends meet with your new job.
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