Nobody really wants to file for bankruptcy, it’s like admitting that you have failed. Still, if you find yourself in a situation where you are borrowing more money just to eat and survive while at the same time borrowing more money to pay off previous debts, filing for bankruptcy might be a wise way to go. If you can’t juggle all of your current debt and have no prospect of increasing your income in the short term, then it’s time to at least consider the concept.
Digging deeper and deeper into debt won’t do you any good, nor is it fair to your current creditors or those you might be looking to in an attempt to “take Peter away to pay Paul.” If you keep juggling too long, you are likely to see everything fall apart. It is much better to file bankruptcy with a plan. If you do it right, the whole experience may be a lot less painful than you might have imagined.
Filing for bankruptcy will give you a chance to start over
Think how wonderful it will be to get out of all that debt. The debt that keeps you from moving forward and doesn’t allow you to go back is stagnant. Imagine that all that financial stress disappears instantly. It may be time to consider filing for bankruptcy.
It is not a decision to be made lightly, nor is it a move to stop paying the legitimate debt you own. It’s just that sometimes people get into difficult situations. Generally, it is a series of events, the accumulation of which leads to a path that ends on a cliff.
You may not be allowed to keep some assets and debts that you will not be able to pay off. There will be tough decisions to make, but if you plan it right, it could be the smartest move you’ve ever made.
Why it is important to hire a bankruptcy attorney
There are some things that we could do ourselves, but without the correct prior experience it could lead to disaster. Filing for bankruptcy can be one of those things. The best bankruptcy attorneys will usually allow you a short consultation at no cost to explain the basics of bankruptcy, usually 30 minutes or so.
You should take advantage of this. Bring your list of questions and a list of all your debts and sources of income. You need to be honest with the reality of your situation to get the right answers and ask the right follow-up questions.
If you file for bankruptcy on your own, this is it. You are on your own. Bankruptcy courts, judges, and trustees cannot advise you and be careful to obtain advice online. A bankruptcy attorney can analyze your exact situation and all of your assets and advise you on which assets you can keep and which ones you will have to turn over to the court or to your creditors.
A bankruptcy attorney can also advise you on which creditors you should continue to pay and which creditors you should stop paying while you go through the process. Also, any tax ramifications you have to deal with or may incur.
An attorney on your side can also help you as a powerful negotiator on your side and on your team. You may be able to reach an agreement with your major creditors; Auto loans, home loans, credit cards and the IRS, and give up bankruptcy? You won’t know until you ask. Remember that filing for bankruptcy has consequences, but also benefits. Make sure you know the facts.
When is the best time to file for bankruptcy?
Once you have consulted a bankruptcy attorney and know all the relevant information, you will want to strategically plan when to apply. It matters. Why does that matter? Well, depending on the type of bankruptcy you choose, you may be using an ‘income averaging’ format, in which case it matters when that averaging begins and ends.
Perhaps you have real estate that is about to be repossessed, if so, you will want to present it prior to foreclosure. If you’re preparing for a mortgage payment modification, that could also change the optimal time to file for bankruptcy.
If you are going through a divorce process, filing for bankruptcy can become more complicated and expensive. Perhaps, on the other hand, it makes more sense to you. This is yet another reason why you need an experienced bankruptcy attorney to help you through the process from start to finish.
Do you have huge expenses to come, unavoidable costs that you will incur? Do you have future costs that you are already obligated to and that are about to require payment?
Are you being bombarded by credit collection agencies asking for money you owe but cannot pay? Have you stopped paying your rent or house? Are you using your retirement money to pay for living expenses and bills? Generally speaking, retirement accounts are safe, so you may want to file for bankruptcy before depleting your retirement account, obviously you will need it later.
In conclusion
Did you know that the most common time people file bankruptcy is in the first quarter, after Christmas expenses, and before taxes are due? Did you know that most people use their tax refunds to partially pay their bankruptcy filing? Some people file for bankruptcy in the first quarter as a New Years resolution to get out of debt in the New Year.
These may seem like good reasons for choosing the first quarter of presentation, but they are certainly not the most important reasons for choosing the best time. Call a law firm to talk and figure this out together. You need a plan, one that makes sense to you.
Why not speak to a bankruptcy attorney about your specific situation and then ask them to help you come up with a plan? You know what they say; “Sometimes timing is everything!”
