The question, "When to file bankruptcy?" has one obvious answer, when you can no longer afford to pay your bills. But there is much more involved in actually picking the right time to file your bankruptcy claim.
There are qualifications that have to met met for each chapter of bankruptcy. If you want to file a Chapter 7 bankruptcy you must pass a means test. The means test looks at your income over the previous six months to see if you qualify, if you make too much you may need to file a Chapter 13 . This is important if you're recently unemployed or expect any change in your income, you want to pick a timeframe that's most beneficial to you.
Another aspect that plays into the timing of your bankruptcy is when you incurred your debts. If you've racked up a lot of credit card debt in the last few months your bankruptcy trustee may declare that debt exempt from discharge, meaning you'll have to pay it. They can review your debt from the past six months and look at each charge and make a decision whether it was legitimately acquired or came about as a way to take advantage of an upcoming bankruptcy.
If you're expecting a lot of new debt in the near future then it's probably not time to file for bankruptcy yet. This is often the situation with people who are struggling with a medical crisis and have astronomical medical debt , but if the bills are still coming in then it's not time to file bankruptcy.
Each person's situation is unique, which means the timing is different for everyone. One of our attorneys can help review your finances and determine when it's the best time to file bankruptcy.