Working as consumer law attorney at our Law Office of Malik W. Ahmad filing chapter 7 is called a fresh start and we believe in getting a fresh start for our clients. However, there can be no fresh start if you do not include all the strategic decisions about all of your creditors and your total debts. If some creditors are left, that means, they can come after you and possibly sue you. What good is this bankruptcy, if you still have a haunting fear? Filing chapter 7 is no good if you can’t include all of them. A small delay is good and vital, if it can help you in liquidating all of your debts.
What Are the Reasons to Delay a Bankruptcy Filing?
A small delay or strategic delay is good, if you can wait and can wipe out everything through this filing. Afterall, you are not getting this opportunity for another 8 years and taking a big hit on your credit scores. Your income recently decreased. Well I had a client who worked two consecutive jobs in a medical facility, and did not pass the Means Income Test despite my struggle with placing all of his deductions in the Means Test. Finally, he got laid off from one of the part time job. It was good timing for him to file bankruptcy as we had prepared all of his paperwork with the exception of the Means Test. This is a good enough reason to delay a filing if your income over the last six months puts you over the means test limit. However, a recent decrease in income qualifies you under the Means Test. Well, delay can be better, but if you are getting raise soon, so it is advisable to file bankruptcy now. As you may know, Means Test only considers last 6 months income counted retroactively. Also, attorneys who use Best Case Software, have knowledge if delay can cure this mean test deficiency.
A Foreclosure Is Already Scheduled?
A date has been set for your foreclosure but it has been postponed for the time being. Now, you can also postpone filing of your bankruptcy because filing of delayed bankruptcy can give you an additional time during which you don’t have to pay mortgage payments because even if you pay and you had already attempted to pay, your lender would not accept any payments from you.
Certain Credit Card Use?
We advise using of credit cards prior to filing of bankruptcy but some folks never listen to us and keep on using the credit cards. It is best to wait another 90 days if you had used your credit card for consumer goods. We should know that using credit cards for consumer goods is an abusive process soon before filing the bankruptcy. Also, if you had used cash advances from pay day lenders and needs to wait a while mostly 90 days or more before you file bankruptcy. This is all the more important if the credit card charges totaled more than $550 on any one card and were for luxuries, or the advances on any one card exceeded $850, the creditor can obtain a court ruling that the charges or advances will not be discharged in your bankruptcy. A delay in this regard is very good. Mostly, we suggest to our clients that they should open a bankruptcy file with our office during this transitory period, and we talk to their creditors and tell them that we are collecting all the papers and data from our clients to file Chapter 7 bankruptcy.
Are Their Other Reasons To Wait?
This list is only partial as there are other common reasons you might want to delay filing:
• Under the avoidance powers of Bankruptcy Code, you made preferential payments to creditors (wait 90 days or one year to file, depending on the type of creditor)
• Did you transfer property to someone within the last one year? Was this less than the fair market value.
• Are you a repetitive filers of bankruptcy and your previous bankruptcy case was dismissed within the past year (or in some cases within the previous 180 days)
• Filing of bankruptcy can stop your loan modification and is counterproductive to any request for loan modification. Of course, this would result in an instant halt on your request.
• You are seeking to discharge back income taxes (wait until three years have passed since the taxes first became due or until two years have passed since you filed a return), or
• You filed a previous bankruptcy in which you obtained a discharge (wait until you are eligible to file again). In other words, your last bankruptcy was discharged less than 8 years.
Maybe You Should Speed Up Your Bankruptcy Filing Now?
Afterall creditors are calling you non stop, and you cannot concentrate on something else. Also, it is good to file now, if you are contemplating moving to other state, and this state has better set of exemptions, and you have already acquired domicile for this state. Sometimes, you’ll want to file for bankruptcy right away. You should also file if you are anticipating an increase in income or anticipate marrying someone, or it is good idea if you are divorcing and filing bankruptcy would clear the concept of community property clearer before you actually file divorce and do all the settlement ahead of time.