In some cases, delaying a Bankruptcy Des Moines filing makes sense. Filing too early can cause you to lose property you may have otherwise been able to keep, or being forced to file Chapter 13 instead of the more lenient Chapter 7. Sometimes, you can deal with debt through other methods, avoiding bankruptcy completely. Below are several situations in which you can avoid bankruptcy.
If You Can Modify a Mortgage
In today’s tough economic climate, many people choose bankruptcy as a way to delay foreclosure. Bankruptcy is a viable solution in this case, but many people file prematurely, making it hard to get a modification. Once Bankruptcy Des Moines is filed, many lenders refuse to start or continue negotiations. A bankruptcy cancels the promissory portion of a mortgage, leaving nothing to negotiate. If you want to modify your mortgage, avoid bankruptcy as long as possible.
If You’ve Made or Lost Substantial Income Lately
When filing for bankruptcy, the judge will look at your past six months’ income to determine your eligibility (what’s known as a means test). If you have too much income, you can only file Chapter 13, which requires that you pay back some of your debts. If you’ve lost income due to a layoff or a pay cut, you can become Chapter 7-eligibile by delaying the Bankruptcy Des Moines filing for a month or two.
If You Don’t Want to Lose Property
If you file Chapter 7 right away you can lose some of your property, but waiting may mean keeping some of it. For instance: if you have a tax refund coming, you would have to hand it over to the trustee if you get it after filing. However, if you get it before filing, spend it on basics and file after the money is gone. If you have more assets than you’re allowed to keep through property exemptions, wait to file until they’re depreciated in value.
The decision to file bankruptcy is never an easy one, and many people file too early. There are certain times that it makes good financial sense to delay filing; by consulting your Bankruptcy Des Moines attorney and following the guidelines listed here, you can file at the time that works best for your situation.
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