Bankruptcy sometimes gets a bad name because many hear the horror stories of those who filed and still lost homes, cars, personal property, sometimes even money. Look deeper, and you'll find stories of filers saving homes, cars, property, assets, and especially money. What is the difference? Timing. Timing is crucial in successfully filing bankruptcy.
It can stop a foreclosure.
It can save your car.
It can protect valuable property.
It can save you thousands if not tens of thousands of dollars.
How can you get this kind of timing?
Get the Right Lawyer
While hiring a lawyer may not seem to be your first decision, it really should be. This is because a lawyer is your go-to expert who can explain everything in this article. You should research as much as possible so you know the rules. But it can save you valuable time and money by hiring the right lawyer.
How do you hire this lawyer? Go local, go with experience, make sure you communicate well with them, and consider rates in comparison to other lawyers with similar experience. Many decide filing with the cheapest lawyer saves money; usually it costs you far more.
Know the Rules for Filing
You need to know eligibility before you plan for filing. There are major differences between Chapter 7 and Chapter 13 eligibility. If you make more than $50,000 a year as an individual, for example, many states will not allow you to file Chapter 7. You might in fact be eligible for Chapter 13.
Know The Differences Between Chapter 7 and Chapter 13
Chapter 7 bankruptcy is a liquidation which clears your debts at the cost of some assets and money. Chapter 13 is a debt repayment plan, where you pay on debts, but typically lose nothing. It's important to note that generally, if you file correctly and follow the rules, you lose nothing in both forms of personal bankruptcy. In some cases, if you do have a lot of nonexempt assets, you may lose some. This is an example where a lawyer can be invaluable in making sure you file the right way.
File Before Major Problems Come
Timing is critical in filing for both Chapter 7 and Chapter 13 bankruptcy. If you wait until the foreclosure process begins on your home, you will likely lose it. If you file Chapter 13 when you know that you cannot pay on the mortgage, you have a chance to make the home part of your bankruptcy. This is one key example where timing is crucial.
Save Money on Discharge
If you plan your Chapter 7 bankruptcy correctly, you can save thousands if not tens of thousands. Now let's be clear: you should not just spend thousands of dollars before you file, thinking somehow this debt will disappear. That is illegal and can easily be caught. On the other hand, if you have a large medical bill coming in, and you know you won't be able to pay it, there is nothing wrong with waiting until you get the bill and then deciding to file. If you file before, it won't be part of the bankruptcy. If you file after, it will.
As you can see, timing is crucial. If you're considering filing bankruptcy, it's time to speak to an experienced lawyer.
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