None of us wants to contemplate the possibility of declaring personal bankruptcy, and it is certainly not something that you should take lightly. However, you may have already decided that this is the best course of action to take based on your own circumstances and debt load. Even if you made a decision with the help of a competent lawyer or financial adviser, you may want to delay your bankruptcy as part of your overall strategy.
Here are three reasons you may want to delay your filing:
Number one: you expect to receive an income tax refund in the near future.
You need to realize that if you file Chapter 7 right now and receive a tax refund shortly afterwards, the court may require you to use your tax refund to help pay your creditors. If you receive a refund first you can use it on whatever essentials you may need at the moment.
Number two: you have accumulated a large amount of debt recently.
Creditors want to do whatever they can to get their money back, and we can certainly understand that. If you recently acquired a lot of debt, it may look like fraud if you immediately tried to file bankruptcy. Your lawyer may suggest that you wait a few months before you file.
Of course, you should never take on debt with the intention of simply doing away with it during a bankruptcy discharge. This kind of spending can be considered fraud by the federal bankruptcy court, especially if you purchase high-priced luxury items on a credit card (not to mention the ethical concerns).
Number three: you have recently been laid off or had a reduction in your pay
With the current economy, many are suffering from layoffs or pay cuts. While this is certainly not a pleasant thing to experience, it may be an advantage if you’re considering filing Chapter 7. That’s because your eligibility largely depends on your income during the last six months. If you wait a little bit, your average monthly salary may be significantly lower and help guarantee your eligibility for Chapter 7 bankruptcy.
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