December 14,2006
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Before You Go Bankrupt
If you are considering filing Chapter 7 liquidation or Chapter 13 repayment plan bankruptcy, there are a few things to first consider. It may sound like a relief to put a stop to the stress of piles of debt and the annoyance of endless phone calls from creditors, but it's much harder to declare bankruptcy nowadays than it used to be.
Experts on the matter insist that timing is of the essence, as Chapter 7 filing now requires means testing. Generally, average income over 6 months is calculated, so, if you've lost a job, the longer you wait to file, the better. Consider, however, that if you have no job, there is nothing for creditors to legally take from you. However, if you find yourself facing repossession, foreclosure, or something similar, there may be no time like the present.
Once you have filed, do not under any circumstances use your credit cards. Use of your credit once you have filed for bankruptcy protection is considered fraud, and these items will not be discharged from your debt. Furthermore, any big-ticket luxury items bought in the months immediately before your bankruptcy may not be discharged – even if you didn't know you were going to file.