When Should I Delay a Bankruptcy Filing?

Anyone struggling significantly with debt may be thinking about filing for bankruptcy in Illinois. Generally speaking, bankruptcy is an essential tool for debtors who need to get a fresh start or who need to reorganize debt and prevent foreclosure. Yet, in some cases, there may be important reasons to delay a bankruptcy filing. If you are considering bankruptcy, what are the circumstances under which you should potentially delay your filing? Consider some of the following situations, which our Oak Park bankruptcy attorneys can discuss with you in more detail.

You are Not Eligible for the Type of Bankruptcy Protection You are Seeking

One of the most common reasons to delay a bankruptcy filing is that you are not eligible for the type of bankruptcy you were planning to file. This is particularly important for debtors who want to file for Chapter 13 bankruptcy in order to stop foreclosure and remain in their homes.

There are very different eligibility requirements for Chapter 7 and Chapter 13 bankruptcy, according to U.S. bankruptcy law. For a Chapter 7 bankruptcy, you must show that your assets and income are low enough to qualify for a liquidation bankruptcy by passing the “means test.” You will need to show that you are a regular wage earner to qualify for Chapter 13 bankruptcy. If you recently got a full-time job and are just returning to a regular wage-earning schedule, it could make sense to delay your bankruptcy filing until you are eligible for Chapter 13 bankruptcy, for example.

You Recently Charged a Large Purchase on a Credit Card or Credit Account

If you recently made one or more major purchases on your credit card or credit account, delaying your bankruptcy filing could make sense. This charge likely will not be dischargeable if you are planning to file for Chapter 7 bankruptcy, and in some cases, it could even raise concerns about bankruptcy fraud.

You Recently Received a Cash Gift or Valuable Asset

Anyone who recently received a cash gift or a valuable asset as a gift or inheritance may need to consider delaying a bankruptcy filing for several reasons. First, if you are planning to file for Chapter 7 bankruptcy, this gift or inheritance could result in you being ineligible to file for liquidation bankruptcy. Next, depending upon your specific circumstances, if you are planning to file for Chapter 7 bankruptcy, the gift or inheritance may not be exempt, and you could end up having it liquidated as part of your bankruptcy case. It would be best if you discussed the specifics with a bankruptcy attorney in Oak Park who can assess your particular situation.

You Filed for Bankruptcy Recently

If you filed for bankruptcy in the past, it might be too soon to file for bankruptcy again. A lawyer can discuss the specific waiting periods for each type of bankruptcy with you.

Contact an Oak Park Bankruptcy Attorney Today

Do you have questions about your eligibility for bankruptcy, or do you want to discuss whether bankruptcy is the right decision for you, given your current circumstances? One of our experienced Oak Park bankruptcy lawyers can talk with you today about your situation and your options for bankruptcy. Contact the Emerson Law Firm to learn more about how we can assist you.




See Related Blog Posts:

Can I Be Forced to File for Bankruptcy?

Absolute Priority Rule: What to Know

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