When Should Chapter 7 Be Filed?
Answers from a Skilled Detroit 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 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. With over 50 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 bankruptcy 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.
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