There are situations which may call for you to file for a Chapter 7 bankruptcy now while other situations may call for you to wait. In situations where you may be facing a lien on your home, foreclosure, repossession of your car, or wage garnishment filing immediately for bankruptcy may be the best decision. There are however several situations where it is a better decision to wait to file. Listed below are few of these situations.
Mortgage Mortification
Filing for bankruptcy can delay a foreclosure. Many people file before they should do so. When this happens it becomes more challenging to receive a mortgage modification. As soon as you file for bankruptcy most lenders will no longer agree to enter into or continue to negotiate your mortgage. This happens because a bankruptcy cancels the promissory note of a mortgage and not the lien on the house. This is why you should know the status of a mortgage modification before filing.
Income Which Has Recently Increased
The previous six months of your income is reviewed by the court when one files for a Chapter 7 bankruptcy. This called a “means test” which is used to decide if you are eligible to file Chapter 7. If your income is found to be too large then you could be restricted to only for a Chapter 13 bankruptcy. Filing Chapter 13 means you will be required to repay a portion of what you owe.
When your income is lowered for a few months then it is figured into the “means test”. This is why if you have recently experienced a layoff, or have had a cut in pay you may want to wait a few months before filing for Chapter 7 so you can qualify.
Protecting 
Your Property
By filing now for Chapter 7 in Georgia you could lose your property. By postponing your filing for a Chapter 7 bankruptcy you could keep your property or have the time to sell it. You could then use the money earned from the sell of the property.
Inclusion of New Debt
You should wait to file for a Chapter 7 bankruptcy if you know you will have large additional debts added on in the near future. This is because Chapter 7 will generally only eliminate the debts you have on the date you file. Any debts added after your filing date will have to paid off by you.
New Debts and Transfer of Property
Making particular transfers of property and paying some payments could actually harm your bankruptcy. Wait to file Chapter 7 bankruptcy if you have charged over $500 in luxury items or services in the past 90 days on a one credit card. You should also wait if you have received more than $800 in cash advances over the past 70 days. This is because the court can see this action as you making the purchases with the intention of never paying back the credit card company. This is considered a fraudulent act and could cause the debt to not be included in your bankruptcy.
Any payment to a commercial creditor exceeding $600 made 90 days prior to your filing date for a Chapter 7 bankruptcy can be “recaptured”, or taken back by the bankruptcy trustee. This also applied to any payment of over $600 made to a family member to friend in the year prior to your filing date. If the money is recaptured then it will be used to pay your creditors.
Transfers of property within two years of your filing date, by means of giving it away or selling it under for a price under its value, can cause your bankruptcy to be challenged. This is because the court may see these actions as an attempt to hide the property from the court. If you granted a Chapter 7 and the transferred property does not fall under property exemption then the bankruptcy trustee could seize the property and distribute it amongst your creditors.
Related Posts
- Chapter 13 Bankruptcy Filing | How to Prepare
- Who Can File for Chapter 7 in Georgia?
- Difference between Chapter 7 and 13 Bankruptcy in Atlanta GA
- Georgia Chapter 7 Bankruptcy Process Overview and Highlights
- Stop Foreclosure with Chapter 7 or Chapter 13 Bankruptcy Filing
- How Long Can I Live in My Home after Filing Bankruptcy?
- Getting to know the Parties Involved in Chapter 7 Bankruptcy in Georgia
- Chapter 7 Bankruptcy Overview
- Discharge of Chapter 13 Bankruptcy in Georgia
- Getting a Mortgage after Filing Bankruptcy in Atlanta GA
