There are two types of bankruptcies: Chapter 7, which typically eliminates all your unsecured debt, and Chapter 13, which generally requires you to eventually repay your debt but also allows you to keep certain assets. The timing of your filing can often determine your option.
When determining whether you are eligible for a Chapter 7 bankruptcy, your income in the past six months may be considered. If it is too high, you may not be eligible. If you don’t have any assets you wish to keep and would rather not have to repay any of your unsecured debts, waiting until you are eligible may be prudent.
If you are expecting to have a surgery or other expensive medical procedures relatively soon, it may be best to wait after you get billed before filing. This is because Chapter 7 bankruptcy only eliminates the debt you incurred before filing.
Filing for bankruptcy may not even be necessary. If you are worried about foreclosure, your lender may be able to modify your mortgage in order for you to meet your payments.
If you are filing for Chapter 7, you will typically lose any assets you own. It may be advantageous to sell these assets and get some money before filing for bankruptcy.
An attorney can help you determine when and if you should file for bankruptcy. Call Scholtens and Averitt, PLC at 870-972-6900 to learn more about whether filing for bankruptcy is right for you.