Most people encounter situations that leave them with large debts to pay. An example of such a situation is getting unexpected medical bills. Once you find that you owe a large debt, you start thinking about applying for bankruptcy. Filing for bankruptcy does not have a specific period in which you should apply. This is because it often comes after you have run out of repayment options for your debts.
Possible Times To File For Bankruptcy
Applying for bankruptcy will enable you to have a chance to have a fresh start in your financial life. However, there are some times in which you can apply for bankruptcy and get a few advantages.
Times Of The Year To File
- You can file for bankruptcy within the first quarter of the year. You will then be able to use your tax refund to pay your legal and court fees. This can assist you to move forward in your case.
- You can also choose to file for bankruptcy at the end of the month. This can help you to spend less time as you are required to submit your income information for two months. By applying at the end of the month, you ensure that you only have one month’s income to submit that makes your application take less time.
- Filing for bankruptcy should also come after you have exhausted all other alternatives and had no other option. If you have other options for how to repay your debts, you should use them instead of opting to file for bankruptcy.
Other IssuesTo Resolve
When you are about to file for bankruptcy, you should bear in mind the debts that will not be forgiven. Debts that will not be forgiven by the court include child support, alimony, and tax debts. You should find out if you have protection from the debts you have. That is the only way you will gain from bankruptcy.
You should also find out what will happen to your home when you apply for bankruptcy. If you were facing foreclosure, you should know if you will get protection from that. If you choose to apply for Chapter 7 bankruptcy, you risk losing your home. However, if you apply for Chapter 13 bankruptcy, the foreclosure notice will be canceled. This is because it will be included in your repayment plan.
Consider what will happen to your property once you have applied for bankruptcy. For instance, if you had put up some of your property as security for a loan, the bank or credit facility has a legal right to take the car even if you are declared bankrupt. You should find out the kind of property that is protected when you apply for Chapter 7 bankruptcy, and is provided for in the exemption laws. This will ensure that you do not lose everything.
You should ensure that no one who co-signed a loan for you will be left re-paying your loan after you file for bankruptcy. Any co-signers will be protected if you apply for Chapter 13 bankruptcy. However, if you apply for Chapter 7 bankruptcy, they will be left repaying the loans that you were not able to pay.
Be Well Advised Before Filing
When you are considering whether to apply for bankruptcy, ensure that you will be comfortable with your personal life being invaded. This is because bankruptcy has to cover every aspect of your personal life. When you file for bankruptcy, your property will be sold to try and repay some of the loans you owe.
If you apply for bankruptcy under Chapter 13 on the other hand, you will have to seek permission any time you want to spend money probably until you have paid most or all of your loans.