How to Determine if You Should File for Bankruptcy?

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How to Determine if You Should File for Bankruptcy?

Call: 888-297-6203

Bankruptcy is not something you are looking forward to, however, sometimes circumstances are unfortunate, and bankruptcy is the last resort to get rid of your huge burden of debts. One of the biggest concerns people have according to lawyers of Los Angeles based bankruptcy law firm Recovery Law Group is that people don’t know when should they file for bankruptcy. An experienced lawyer can help you determine whether it is time to file for bankruptcy or you could opt for any other debt resolving the solution. To consult experienced bankruptcy attorneys, you can call 888-297-6023. Here are a few questions that can help you reach to the conclusion of whether a bankruptcy filing is ideal for you:

  • Can you make minimum payments on your credit cards or not?
  • Do you have a wage garnishment order cutting into your wages?
  • Are debts causing stress?
  • Are you facing constant harassment (threatening phone calls, letters, emails) from credit collectors?
  • Are you considering debt consolidation?
  • Are you using credit cards for necessary items?
  • Are you facing any lawsuit from your creditors?
  • Are you unaware of how much money you owe to various creditors?
  • Have you considered a payment plan with creditors?
  • Are you unable to manage your payment plan?

Should you wait to file for bankruptcy?

Though bankruptcy could be the best way to get rid of debts, there are sometimes when waiting to file for bankruptcy is the sensible choice.

Some of the situations where waiting to file for bankruptcy makes sense include:

  • If you wish to protect some property and filing for bankruptcy will hamper your chances of doing so, you should hold on filing for some time. this can be possible if you wish to protect your property through homestead exemption but have not owned the property for the required duration. In this case, waiting for some time would be a sound decision.
  • If you are expecting to incur any new debts waiting to file for bankruptcy would be sensible, else you won’t be able to include the debts in your bankruptcy.
  • Which chapter of bankruptcy you qualify for depends on your income and expenses. Chapter 7 is quicker, but you cannot protect all your assets in this bankruptcy, while Chapter 13 involves repayment of debts as per the court-approved 5-year repayment plan. If you end up with less income, then you might be able to qualify for chapter 7 bankruptcy. Since the previous 6 months of income are considered to test the eligibility for chapter 7, waiting for some time makes sense.