Managing personal finances today is harder than ever before. Due to the increasing cost of living, historically high medical expenses, and flat wages, many people are struggling to get by. For those that find themselves in overwhelming debt, filing Chapter 7 or Chapter 13 bankruptcy could make sense as it will allow them to organize their obligations and get a clean financial slate.
While some believe that you should declare bankruptcy as soon as possible, there are a variety of situations in which it could make sense to delay your filing.
Restructuring Your Mortgage
One of the reasons why people struggle financially is because they cannot afford their mortgage payment. Falling behind on living costs could end up with the bank foreclosing on your house. However, one way to delay this is by restructuring your mortgage, which could lead to much lower monthly payments.
If you are in the process of restructuring your loan, you should wait to file until the restructuring is complete. If you have declared bankruptcy before it is complete, there is no way the lender will restructure your loan.
Recent Income Decline
When you’re going through the process of declaring bankruptcy, one of the main things that the bankruptcy court will focus on is your ability to repay the debts. When the bankruptcy court is doing this, they will look at what your income has been over the past six months. If you recently lost a job or had a cut in compensation, you should wait at least six months until you declare bankruptcy. Waiting results in a lower reported income, which will work out in your favor.
You Expect New Debts
In some cases, a person that is going through the bankruptcy filing process will know that they have additional debts coming. For example, if you just had a medical procedure that was not covered by insurance, you will know that the hospital will be sending you a bill shortly. You should make sure that you have records of this debt before you file bankruptcy.
Rushing through this process may mean that this debt will not be included in your restructuring plan and you will be required to continue to pay it out of pocket, even if you have declared Chapter 7 and have the majority of your debts waived by the bankruptcy court.
Consult a Louisiana Bankruptcy Attorney
Orum Young Law Offices has filed over 20,000 bankruptcies in Northeast Louisiana and continues to help struggling consumers repair their finances through either Chapter 7 or Chapter 13 bankruptcy. We can analyze your finances, suggest the most favorable type of bankruptcy for you, and explain what the process will likely entail. Contact us today for a free case evaluation. Our Trial Guarantee ensures that we will take your case to trial per your request.