Is It Time to File for Chapter 7 Bankruptcy? Or Should You Wait?

As a Memphis bankruptcy lawyer who’s helped thousands of people get out of debt, I can tell you timing sometimes is everything. If you’re considering bankruptcy, you may wonder if now is the right time to file Chapter 7, or if you should wait.

Here’s what you need to know.

How Chapter 7 Works

Chapter 7 bankruptcy is a way for people who are struggling with their debts to get a fresh start. When you file for Chapter 7 bankruptcy, you have the opportunity to get out of most unsecured debts, like credit card bills and medical expenses. It may include getting rid of certain assets in order to pay back your debts, but not always.

That’s part of the challenge with knowing if it’s time to file Chapter 7 bankruptcy: every situation is different, and you may not realize the advantages and consequences of the timing on your own. It’s good to think about it in advance and talk to a bankruptcy attorney who can guide you through the process.

When It’s Too Early to File Chapter 7

There’s nothing wrong with bankruptcy planning, and it’s something we offer through a free consultation at our firm.

Sometimes you know you have a lot of debt, but you also have major life events coming up that could complicate things. It’s wise to talk through your situation before making any assumptions about what’s best for you financially.

One common example: divorce. Often, people wait to file until after their divorce is finalized. That can be the right choice, especially if there’s no chance of filing bankruptcy jointly. But depending on the situation and the types of debt you have, it may actually help you to file now, before the divorce goes through.

Sometimes people wonder if they have enough debt to qualify. Bankruptcy doesn’t really work that way. $5,000 in debt might not be much for some people, but for plenty of Americans, it’s an impossible amount. The question is, “Do you have so much debt that you know you can’t pay it back?”

So as you can probably tell, your best choice in timing depends a lot on your personal situation and finances.

When It’s Too Late to File Chapter 7

It’s never too late to file Chapter 7, but there are things you can do to delay bankruptcy that can really hurt you.

For example, to pay back the mounting debt, you might dig into savings you desperately need.

We see this all the time at our firm: people use their Social Security or life savings to pay the debt. Sometimes they’ll take out leans on a house or sell major assets.

There’s nothing that breaks my heart more as a bankruptcy attorney than meeting folks who liquidated their retirement to pay their credit card bills. With one free conversation, you can save your retirement and get rid of the debt, all at once.

So if you’re making major sacrifices toward your future in order to pay back yesterday’s debt, remember: you’re not helping yourself by delaying bankruptcy. It’s a tool there to help you, so you don’t have to lose everything moving forward.

Free Consultation to Help You Decide

It’s important you go into a bankruptcy with a clear idea of how it will impact you. That’s why our firm offers a free consultation, no strings attached. We will talk through the timing and any other questions you might have, so you can make a wise decision.

What’s more, we offer free reports to help you every step of the way, including our very popular report Life After Bankruptcy and the book The Life-Changing Power of Bankruptcy. These resources will help you plan for your bankruptcy and build a much better financial life afterward.

Most importantly, if you’re considering bankruptcy, you don’t have to wonder about it or ask your questions to Google. You can talk with a real-life attorney who knows the ins and outs of your specific situation, for free.

That’s what we’re here for. It’s how we’ve gotten so many great reviews and multiple awards for client satisfaction. And we’d love to help you, too.

To get started, just call us at 901-327-2100 or fill out the form on this page. We look forward to talking with you.