When to file bankruptcy

when to file bankruptcy

Here are the signs it may be time for you to declare Chapter 7 bankruptcy

Maybe you and your loved ones have fallen victim to job loss or underemployment in a tough economy. Maybe you have medical debt that is overwhelming you. Or perhaps your finances have simply begun to spin out of control. Whatever the contributing factors, when you're considering Chapter 7 bankruptcy, it's important to know when it's time to move forward. 

Signs the time is right for Chapter 7 bankruptcy

Chapter 7 bankruptcy can help you regain your financial footing, erasing certain debts and allowing for a fresh start. But how do you know when it's time to declare Chapter 7 bankruptcy? Here are the signs to look for. 

1. Your dischargeable debts exceed $10,000.

Not all debts are dischargeable, and therefore not all debts qualify under Chapter 7 bankruptcy. Dischargeable debts can include medical bills, personal loans, credit card debts, utility bills and back rent. When a debt is discharged, you are no longer liable for that debt, and the lender cannot attempt to collect it. 

2. You are concerned you could be sued or your wages could be garnished.

If it seems likely your wages will be garnished due to unpaid debt, or you may face legal action, the time may be right to look into filing for Chapter 7 bankruptcy. 

3. You pass the means test.

The means test examines your income, assets and expenses and determines whether you have enough income to repay your debts. Step one is to determine whether your household income is below Wisconsin's median income (or the median income in the state where you reside). 

4. You haven't transferred property to a family member recently.

During the legal process, any transfers of property within the past year are likely to be examined. If you've recently transferred property to a family member, the timing may not be right for you to file Chapter 7 bankruptcy.

5. You don't own valuable property.

With Chapter 7 bankruptcy, debts are paid off with assets. And because some of your assets could be used to pay off your debts, if you have an expensive vehicle or a house you want to keep, Chapter 7 may not be right for you at this time.

6. You aren't planning to sue someone, nor are you in the process of suing someone. 

If you are waiting to file a suit against someone or one is already underway, you may want to await the outcome of that legal action before filing for Chapter 7 bankruptcy, depending on the scope of the lawsuit. Your attorney can advise you on your specific situation. 

7. Your credit score is low.

Filing for Chapter 7 bankruptcy can have long-term consequences when it comes to your credit score. If your credit score is already low, under 600, for example, the time may be right to declare Chapter 7 bankruptcy. 

8. You don't expect your financial situation to get worse.

You can only file Chapter 7 bankruptcy every eight years, so if you feel your financial situation will worsen in the near future, you may want to wait. 

When it's time to declare bankruptcy, we're here for you.

The decision to declare bankruptcy should not be taken lightly. It's complex, it can be difficult, and it can have long-term implications for your financial well-being. If you live in La Crosse, Wisconsin, or the surrounding areas, we're here to help when you're considering filing Chapter 7 bankruptcy. Our attorneys can provide you with the professional consultation you need and the knowledgeable support you deserve. Contact us to learn more about how we can help you dig out from under debt. 

bankruptcy lawyer in la crosseBy Brian Weber, Bankruptcy Lawyer at Johns, Flaherty & Collins, SC. For a free consultation regarding Chapter 7 Bankruptcy, call him at 608-526-9320.
 

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