The Covid pandemic put many people out of work. As many people try and navigate through the pandemic, the single thing that most people have felt is an impact on their income. With so much uncertainty, many people don’t know where to turn and wonder if filing for bankruptcy may be the best decision for them.
How Can Filing Bankruptcy Help me?
Filing for bankruptcy, can be a way to get a fresh start. Many people who had businesses before the pandemic, may not have been able to keep them afloat. Moreover, if you lost your job and are no longer collecting unemployment benefits, then filing bankruptcy can be a good option to look into.
Chapter 7 bankruptcy allows individuals a fresh start. In Chapter 7 bankruptcy, your debts are discharged. Chapter 13 bankruptcy, on the other hand, allows you to catch up on your mortgage payments and pay back your creditors in a 3-5 year repayment plan.
Should I file Bankruptcy Now or Wait to See if I get a Job?
Many people make the mistake of waiting to file for bankruptcy. Many times, people wait until they are back on their feet to try and file. This isn’t always the best way to handle a bankruptcy. If you lost your job due to COVID and are wondering if you should file for bankruptcy, then you may want to consider whether now is the right time. Many times, people believe that once they get the new job, they will be able to pay their debts back. However, this isn’t always the case. With interest rates accruing and creditors suing, finding a new job may still not pay you enough to repay your debts.
It is important to speak with a bankruptcy lawyer sooner than later. Even if you don’t know if you want to file for bankruptcy immediately, it could be a good way to be able to financially plan what your best option is.
If your wages are being garnished or your house is going into foreclosure, it may be time to start the bankruptcy process immediately. Bankruptcy provides individuals with protections against foreclosure and wage garnishments.
During these uncertain times it can be difficult to decide what you should do. However, getting ahead of your finances can be the best thing that you can do.
Is Pre-Bankruptcy planning allowed?
Yes- pre bankruptcy planning is allowed. While it can sound like someone who asks this question is looking to scam the system, it is not. People who are in financial trouble are able to consult with bankruptcy lawyers to determine when the best time would be to file for bankruptcy. Pre-bankruptcy planning allows you to understand the protections that you have under the law. It is important to understand how your property may be impacted if you file, what chapter of bankruptcy you qualify for, and how this will impact your future.
What Does it Mean to Qualify for Bankruptcy?
Unfortunately, not everyone can file for bankruptcy. To qualify for bankruptcy, the court will look at your income and assets to determine which chapter you should file. You will need to pass a Means Test. In a Chapter 7 bankruptcy, the court will look at your income and assets to determine if you are below the median household income. If you are below that threshold, then you can file for Chapter 7 bankruptcy. Many people wait until they start working and no longer qualify for a Chapter 7 discharge because they make too much money.
In a Chapter 13 bankruptcy, you are required to repay all or a portion of your debts over 3-5 years. If you are behind on your mortgage payments, Chapter 13 bankruptcy can be a good way to help you start over.
Speak with a Bankruptcy lawyer about When you Should File for Bankruptcy
It is important to understand your current financial situation and decide whether you should file for bankruptcy now or wait. A bankruptcy Lawer can discuss what options you have available to you and how the law will protect any assets you have. Karra L. Kingston has been helping individual’s get out of debt for many years. Contact the law office today to get a free consultation.
