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Posted by: Maricopa Lawyers on Oct 15, 2016

Deciding when to file for bankruptcy can be tricky. In some situations, filing too early can mean losing property you may have been able to keep. It can also mean having to file for Chapter 13 instead of Chapter 7 bankruptcy. You may even be able to avoid bankruptcy all together. Knowing when to file is not always a science, but this article aims to help make that decision a little easier.

When You Should Wait Before Filing Bankruptcy

If you have an opportunity to Modify Your Mortgage

Filing for bankruptcy will cancel the promissory note part of your mortgage, leaving nothing left for you to negotiate on your mortgage. So, if you are wanting to modify your mortgage in the future you should avoid bankruptcy all together.

If Your Recent Income Has Been High

When you file for bankruptcy the court looks at your income over the past six months. If you’ve had a high income the court may determine that you only qualify for Chapter 13 bankruptcy. Chapter 13 requires you to repay a portion of your debts instead of wiping your debts out all together.

If You Have Property You Don’t Want to Lose

Chapter 7 bankruptcy may lead you to lose property to pay back your debts. Waiting to file could give you time to figure out how to keep the property or at least give you time to sell and use the proceeds. You may lose tax refunds you are expecting as well, waiting to file allows you to spend that refund.

If You Will Have New Debts Soon

Bankruptcy only wipes out debts you have at the time you file. If you are expecting more significant expenses in the near future, it’s a good idea to hold off on filing.

If you still need help deciding, contact one of our experienced lawyers who can help you make the right decision.