In this article, you can discover
- The best time to file for bankruptcy under Chapter
- The complications when couples choose to not file jointly for bankruptcy and that filing for bankruptcy may remove a property lien.
- The role and benefits of having a bankruptcy attorney for consumer debt.
When Is The Best Time To File Under Chapter 7 Bankruptcy?
There is no real “best time” to file for bankruptcy. Filing for bankruptcy depends on your personal circumstances, reasons, and motivation.
If you are filing for bankruptcy because your wages are being garnished, the best time to file might be immediate. If you don’t have some kind of emergency going and have time, then your best time to file might be after you’ve finished planning for bankruptcy to make sure you can protect your assets as much as possible.
Another thing to keep in mind is that the amount of debt that brings a person to bankruptcy is subjective. One person may say, “I owe $10,000 and it’ll be a decade before I’m able to pay it off.” But another person might owe a couple hundred thousand dollars and not need to file.
Finally, you need to consider the type of debt you have before filing for bankruptcy. If you owe a few hundred thousand dollars, but most of the debt is for a home and a car, that’s a different situation from the person who owes $80,000 in credit card debt.
Whatever your questions and concerns are, if you’re feeling stressed out by debt, you can always speak with a bankruptcy lawyer to see what your options are. This is where an experienced bankruptcy lawyer can provide invaluable help.
Should Spouses File Jointly Under Chapter 7?
Generally, spouses should file jointly under Chapter 7 bankruptcy. But what if you want to file for bankruptcy and your spouse does not?
Frankly, as an experienced bankruptcy lawyer, this is a red flag. Spouses who file together are eligible for greater exemptions than single filers and have an easier time managing the income portion of their bankruptcy case.
If your spouse is unwilling to file jointly with you, it will make your Chapter 7 Bankruptcy case much more complicated. Still, that doesn’t mean you’re without options. Consulting with an experienced bankruptcy lawyer is the best way to get the information you need to decide how you’ll move forward.
Should Spouses File Jointly Under Chapter 7 If They Handle Their Finances Separately?
Separate finances in a marriage are rare, but they aren’t unheard of. The reality is that most of the time, couples don’t ever take the necessary legal steps to truly separate their finances.
You might have a bank account that you think of as yours and another bank account they think of as theirs – but both accounts are likely to be community assets that you and your spouse each have an equal interest in.
More importantly, the bankruptcy court’s not going to accept that $1,000 in your bank account is completely separate from the $30,000 that your spouse has and that their money is not your money.
If you have completed the necessary paperwork, if you’ve finished your homework, and set yourselves up in a way that you’re truly separate, then filing bankruptcy for one spouse might be doable. However, speaking as an experienced bankruptcy attorney, that is not usually in the best interests of my clients.
How Does Filing Under Chapter 7 Affect Lawsuits And The Judgments That Have Already Been Filed?
If you have a lawsuit filed against you, filing for bankruptcy under Chapter 7 will “stay” the proceeding, meaning that it will be paused.
In fact, this is the reason that many people file for Chapter 7 Bankruptcy – because assuming the lawsuit is coming from the right kind of debt, that debt will be discharged, meaning you will not have to pay that debt.
Because of this, the best time to file for bankruptcy may be before that lawsuit turns into a judgment and gets executed.
How Does Filing Under Chapter 7 Affect Property Liens?
Once a lien has been attached to a property, it’s a big problem – but it may be a problem that bankruptcy can help you solve…
There are ways that bankruptcy can allow a person to avoid judgment liens and to have them removed from the property. The truth is, there are countless personal circumstances and considerations that need to be taken into account before making the decision to go forward with bankruptcy for this reason. What’s more, removing a property lien is a separate part of a case with a separate fee.
So, if you are looking into removing a property lien by filing for bankruptcy, you should contact an experienced bankruptcy attorney as soon as possible. This way, you can go over the many different values, judgment amounts, and mortgage priorities to see what can be done and whether filing for bankruptcy is worth the extra work and the extra charge.
How Are Mortgages And Bills Handled In A Chapter 7 Bankruptcy?
When you file for bankruptcy, we work to eliminate your obligation to pay a creditor. Thus, filing for bankruptcy will get rid of your obligation to pay a mortgage or a car loan. However, we cannot necessarily eliminate the underlying security agreement that says, “If no payment is made, the property will be repossessed.”
For example, if you file for bankruptcy, that filing won’t give you a free house or a free car. If you want to keep the house or the car after filing for bankruptcy, you are going to have to keep paying for them. On the other hand, if you don’t want the house or the car, bankruptcy can allow you to walk away from one or both.
You can think about it this way: credit card companies will not repossess a credit card or demand the balance to be paid because that personal obligation is discharged – but creditors will foreclose on a house or repossess a car for non-payment.
If you keep the property, the action of the creditor depends on where you are in the bankruptcy process…
For example, if you just stop making mortgage payments, or if you make only half a payment, the creditor might come and try to foreclose on the home. The creditor may even try to remove the automatic stay, which is a court order that prevents creditors from taking steps to collect debts.
If you want to prevent that, you might need to pursue a reaffirmation agreement or a redemption agreement. Of course, if that’s the case, it’s important to speak to a bankruptcy attorney about whether such an agreement is appropriate based on your type of debt and circumstances.
What Is The Role Of An Attorney For Consumer Debt In A Chapter 7 Case?
1. We help you get ready to file.
We make sure you qualify to file and pass the means test so your case can be filed without being pulled into another chapter, causing delays.
2. We plan your case properly.
By planning ahead, we can help ensure that your case sails through the system without any roadblocks.
3. We look for problems ahead of time.
We’ll carefully go through your assets to make sure every available exemption is in place to protect your property.
4. We go to court with you.
We show up with you at the 341 Meeting Of Creditors so that you don’t have to go through any part of the process alone.
5. We do the heavy lifting for you.
We monitor whether any creditor objects to your discharge. If you have substantial assets, we talk to the trustee about what those assets are, whether they will be turned over, or whether you have an offer to make to the trustee.
6. We make sure all the boxes are checked.
From helping connect you with mandatory credit counseling classes to walking you through lien avoidance, we do whatever is in your best interest – 100% of the time.
With the guidance of a skilled attorney for Bankruptcy Law, you can have the peace of mind that comes with knowing that we’ll make it look easy.
For more information on Bankruptcy Law in Arizona, a free initial consultation is your next best step. Get the information and legal answers you are seeking by calling (623) 696-3429 today.