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How Timing Matters when Filing for Bankruptcy

Admin • Jul 03, 2018
Bankruptcy Law Paper and Gavel ─ St. Joseph, Mi ─ Armstrong, Betker, & Schaeffer PLC

While choosing the right type of bankruptcy is important, timing your bankruptcy filing is vital as well. Timing your bankruptcy properly will often result in receiving the best results for your case. Find out when you should file immediately or when you should wait to file with bankruptcy.

FILING NOW IS BETTER IN CERTAIN SITUATIONS

When you decide to file for bankruptcy, visit a lawyer for advice and help. Speak to the lawyer about whether to file now or whether to wait. Your lawyer will review all the facets and facts about your situation to help you decide when to file. In certain cases, filing now is more beneficial.

Here are some examples of situations of when you shouldn't wait to file:

  • Your mortgage lender pursues foreclosure on your house: If you wait too long after a lender initiates foreclosure proceedings, you could lose your home. If the lender has started the foreclosure process already, file quickly to stop the foreclosure from proceeding. Depending on what bankruptcy type you file under, you can stop a foreclosure from occurring either temporarily or permanently.
  • Your car lender seeks repossession: If your car lender notified you that they will shortly repossess your car, stop this from occurring by quickly filing for bankruptcy.
  • You plan to receive money in the future: If you expect a large sum of money to come your way in the future from an inheritance or lawsuit settlement, you may want to file before you receive this money. If you wait to file, you have a greater chance of losing the money and losing your eligibility for using Chapter 7.
  • You plan to marry: Once you get married, you must include your spouse's income in the calculations, which could prevent you from qualifying for Chapter 7. Additionally, you may put your spouse's assets at risk if you wait to file until after the wedding.


If you find yourself facing any of these situations, make sure you fully discuss your situation with your lawyer before you file for bankruptcy.

WAITING UNTIL LATER IS BETTER IN OTHER SITUATIONS

You also have circumstances when waiting to file for bankruptcy is the best option you have.

 Here are some examples of times you should wait to file:

  • You and your lender plan on a loan modification: If your lender is willing to modify your mortgage loan, you should wait to file until this is complete. The modification will offer new terms for your loan, which will make it easier for you to pay.
  • You've had a higher income recently: If you received extra income or additional money in the last six months, this circumstance could push your income over the threshold requirements for Chapter 7.
  • You recently disposed of assets: The bankruptcy court will look at your assets, including those you recently sold or disposed of. If they believe you intentionally got rid of the assets to prevent losing them in bankruptcy, they could throw your case out of court.
  • You expect to receive more bills: You have only one chance to include all your debts in your case, so you should make sure you have all of them before filing.


The amount of time you should wait before filing will depend on your unique financial situation.

 Your bankruptcy situation may have certain factors and circumstances that would offer better results if you file now or if you wait to file. No matter what, a lawyer can help you look at the entire picture to help you know what your best option is. To learn more, contact Armstrong, Betker and Schaeffer, PLC to set up a free consultation visit.

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