When Should Chapter 7 Be Filed?
Answers from a Skilled Detroit Chapter 7 Lawyer
Whether one should file for Chapter 7 bankruptcy protection, as opposed
to some other type of bankruptcy will be based upon several factors. These
factors include the status of your dischargeable debts, the actions being
taken the debtor's creditors and the status of the debtor's nonexempt
assets. All of these issues can come into play when deciding whether to
file a Chapter 7 petition.
One should only file a Chapter 7 petition once all anticipated debts have
been incurred, because one can only file a Chapter 7 once every 8 years.
If you have incurred medical expenses, wait until your treatments have
concluded, as it would obviously be advantageous to wait until all of
the medical bills are submitted to you, and your treatments completed.
If you are expecting a tax refund, wait until you have received and used
the proceeds of that tax refund. Otherwise, the money you receive will
become part of the nonexempt asset portion of your estate which the bankruptcy
trustee assigned to your case will use to pay off some of your debts.
If you are expecting to inherit or acquire property either through a divorce
or a life insurance policy, you should wait until after that property
has been acquired.
Stopping Collection Actions: The Automatic Stay in Chapter 7 Bankruptcy
Finally, if your creditors are threatening hostile action, the petition
should be filed as soon as possible to obtain the automatic stay which
will bring all creditor collection activity to an immediate halt. Attachment
of assets, garnishment of wages or a foreclosure of your mortgage are
all examples of hostile actions by creditors. If any of these situations
are arising for you, it is wise to file a petition as soon as possible
in order to protect your property.
over 25 years of experience in helping people get debt relief, the Law Offices of Marshall D. Schultz
can assist in choosing the right time to file a Chapter 7 case.
Contact our Chapter 7 lawyer in Detroit to schedule a
free evaluation as soon as possible so that we can assist you to make the right decision
– the decision that will give you the most benefit, and the greatest
relief from crushing debt.