Many people assume that bankruptcy is filed because a person is in an extreme amount of debt, with no foreseeable way to pay off said debt, but what exactly does that mean. What amount of debt is too much? At what point is it time to file bankruptcy? Are there other options available? While being in a extreme amount of debt is a completely justifiable reason to file for bankruptcy , there are other factors to consider. In some cases it is advisable to follow through with bankruptcy with the help of a bankruptcy attorney in Port Charlotte, and it’s better to wait before filing. This article discusses when it’s the right time to file for bankruptcy and when it’s not.
Why You Should File Bankruptcy Now
It’s common knowledge that bankruptcy hurts your credit and while the “pain” caused by bankruptcy is manageable and overtime can become a non-issue, bankruptcy is still a major financial decision that should not be made lightly. According to Legalzoom.com, one of the immediate benefits that can be gained from filing bankruptcy is what is known as an automatic stay. Once you file for bankruptcy and your creditors have been notified of this status, they are no longer allowed to contact you due to the automatic stay to collect a debt or sue you. The exception to this rule is if you’re facing foreclosure, however this will help to delay the process. Other reasons to consider filing bankruptcy immediately, include but are not limited to the following financial crises:
- Debt collectors are suing you. If you owe a debt and have failed to make payments to reduce or remove this debt, the debt in question will likely be handled by a collection agency at some point, according to SmartAsset. Once the debt is turned over to a debt collector they will try to reach you via email, phone, letters, etc, and if for some reason these go unanswered for an extended amount of time, they are likely to sue you for the money owed, plus interest. Because of the automatic stay, many people facing this type of legal action smartly turn to filing bankruptcy with the help of experienced Port Charlotte bankruptcy attorneys.
- You are unable to pay your bills. If you have no savings, have recently experienced a job layoff, or have been unemployed for a lengthy amount of time, you may not have the means to pay your bills. Loss or significant decrease in income is a serious reason to contact a bankruptcy attorney in Port Charlotte for help filing bankruptcy. Using credit cards or going to payday/title loan companies that offer cash for extremely high interest rates just to get by is no way to live. In these cases, bankruptcy is always the right decision.
- You’re about to lose your home and/or car. Struggling to keep up with mortgage and car payments can be a telltale sign that it’s time to file bankruptcy. In the event that you are facing foreclosure and/or repossession of your car the automatic stay that occurs once you file for bankruptcy can delay a foreclosure and can temporarily stop repossession of your vehicle as long as you can catch up and maintain payments. A Port Charlotte bankruptcy attorney will be able to assist you in the process of creating a plan that allows you to keep your assets, in addition to a repaying any outstanding debts.
- Your wages are being garnished. When your wages are being garnished it can be considerably more difficult to stay financially afloat. Wages are garnished generally when a debt collector is trying to get the money owed to them by whatever means possible. Some states will even freeze your bank account! SmartAsset states that, “If a creditor obtains a court order for a wage garnishment, your employer is required by law to hold back a certain amount of money from your check each pay period until the debt is paid in full.”
Filing for bankruptcy, protects you from further wage garnishment by means of the automatic stay. The only exceptions to this are alimony and child support.
Why You Should Wait To File Bankruptcy
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While the automatic stay granted with bankruptcy can seem like a good idea for most, there are some additional considerations to take before deciding whether or not filing for bankruptcy is the right decision for you. It’s important to discuss your options with a bankruptcy attorney in Port Charlotte. They can help to provide you with the answers you may be seeking in addition to helping to throughout the process if you do decide to file. The following factors may be indicators that you need to delay bankruptcy or consider other options.
- If your expecting considerable debts in the near future. According to NOLO, if you expect to have substantial expenses in the near future, like knee surgery for example, you may want to hold off on filing bankruptcy. The reason for this is if you file now, you may end up having to pay the expenses associated with the knee surgery. If you wait, you may be able to have those expenses eradicated via bankruptcy. For specific filing information it is essential to speak with your personal Port Charlotte bankruptcy attorney.
- If your income is too high. If you’re planning on filing Chapter 7 bankruptcy you’ll want to make sure your eligible beforehand. The courts look at the your income from the last six months to determine your eligibility. If you do not meet the requirements you can file Chapter 13, which may mean you need to repay some of your debts.
- You want to keep your property. If you have property you’d rather not lose to the bankruptcy courts, it may be in your best interest to wait to file bankruptcy. Alternatively, you can sell some of your property to help pay some of your debts. One example of this is a tax refund. Once you file bankruptcy and were to receive your refund you would have to give it all to the bankruptcy trustee. However, if you use the refund to purchase necessities, pay bills, etc, you can avoid having to lose the benefits of a tax refund.
If you’re considering filing bankruptcy, contact your local Port Charlotte bankruptcy attorneys at Miller, Hollander & Jeda. We provide free initial consultations to help you determine whether or not bankruptcy is the best option for you.
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