When Do You Need to File Bankruptcy?
Bad things do happen to good people, but you can file bankruptcy to help. If you are overwhelmed with debt, filing bankruptcy may be a wise choice. Signs that tell you filing bankruptcy may be urgent:
- More than one month behind on mortgage, with no plan to catch up in the immediate future;
- Behind on essential vehicle and unable to catch up;
- Unable to meet your basic monthly expenses, such as groceries, housing, transportation, and utilities, without using credit to make your expenses;
- Taking cash advances, payday loans, title loans, or other high-interest loans;
- Major loss of income, or unusually high increase in expenses such as medical bills;
- Overwhelming tax debt;
- Unable to afford to make more than the minimum payments on your debt with large balances;
- Losing sleep or suffering extreme anxiety due to worry and stress over money;
- If you have received a notice that your home is going to be foreclosed;
- If you have received a notice that your car is going to be repossessed;
- You have been sued by a creditor;
- You have received a notice of garnishment or levy.
Do I Need to File Bankruptcy Now? or Should I Wait and Keep Trying to Catch Up?
The timing in filing your bankruptcy is of critical importance for several reasons. Regardless of whether you file a Chapter 13 or a Chapter 7 bankruptcy case, the last 6 months of income (not counting the month of filing) is extremely important. If you get bonuses on an irregular basis, you may need to file either before or after a bonus in order to make filing your case smoother. Another illustration of the importance of timing is certain rules on the dischargeability of debts arising from cash advances or luxury purchases made immediately before bankruptcy is filed. Finally, timing can be critical if you have repaid debts to family, business partners, or a company that you own. Your bankruptcy lawyer will look at these details and help you determine the most favorable timing for you.