If you are overwhelmed with your debts, filing for bankruptcy is one of the ways you can protect yourself. It can allow you to reduce or eliminate your debts. However, timing is key. Sometimes, filing for bankruptcy too early can cost you assets you would have otherwise been able to keep. It may also deny you the chance to evaluate other options. Imagine realizing that if you had not filed for bankruptcy you could have avoided bankruptcy altogether. That said, how will you know whether it’s the right time to file for bankruptcy? Here are a few tips from our bankruptcy attorney in St. Charles Mo

Consider delaying declaring bankruptcy if:

● You need to modify your mortgage

If you plan on refinancing your mortgage, having a bankruptcy on your credit report can make it harder for you to qualify. Usually, if you’ve filed for bankruptcy, you will be subjected to a waiting period, which normally starts on the dismissal date. For Chapter 7, you will need to wait at least two years.

● You recently lost your job or got a pay cut

When filing for bankruptcy, you will need to take the means test, a standard used to assess your income over the past six months to determine your eligibility. That said, if you recently lost your job or got a pay cut, it would help to wait a few months before declaring bankruptcy to ensure you qualify for Chapter 7. Otherwise, you may wind up qualifying for Chapter 13, which requires you to repay a portion of your debts simply because the means test didn’t accurately capture your recent financial status.

● You are in for more debts

If you anticipate having new debts soon, then it’s a good idea to hold off on filing for bankruptcy. Especially if you plan on filing Chapter 7 bankruptcy, given that it will only cover the debts you have as per your filing debt. It is possible to make multiple bankruptcy filings. However, the waiting period tends to be long – eight years for a Chapter 7 filing and two years for a Chapter 13 filing.

Reasons to file

Declaring bankruptcy doesn’t have to be your go-to solution when you are in financial distress. But if the situation warrants it, it’s still an effective way of getting financial relief from your debts.

Consider filing for bankruptcy if:

●  Property or assets are at risk of being seized by creditors.
●  A landlord is threatening to evict you.
● You are about to get a pay rise or take on a higher-paying job.

Bankruptcy Attorney in St. Charles Mo

Be sure to evaluate your situation thoroughly before declaring bankruptcy. The process can be tedious and confusing at times. For that, our bankruptcy attorney in St. Charles Mo is here to advise you on the best course of action. Give us a call today.