Nobody wants to feel like they have no alternative to declaring personal bankruptcy. After all, the list of consequences of such a move is long and the reasons you are in a situation where you might be contemplating it in the first place have probably already given you much cause for stress. However, if you are in a position where you simply have no choice, you may want to just pause for a moment. Even if you have received legal and professional financial advice to back up your belief that you should be declaring personal bankruptcy, there are three reasons why you might just want to hold off on filing.
First of all, you might be expecting an income tax refund shortly. Bear in mind that if you declare chapter 7 now and receive an income tax refund afterwards, this could be seized to pay off creditors. If you receive the refund before declaring personal bankruptcy, the money is yours to deal with whatever essentials you require.
You may also want to delay filing if your debt accumulation is recent. A lawyer may advise that a large amount of debt accumulated and followed by immediate bankruptcy filing could resemble fraud and you may be well advised in that case to wait a while.
If you have recently been laid off or had a significant reduction to your salary, you might want to consider waiting a while before declaring personal bankruptcy. There is logic to this! When you file, your average income for the last 6 months is taken into consideration. And if you wait until a few months after a reduction in your income, you increase chances of securing chapter 7 bankruptcy eligibility. Therefore, holding off even just a few months could make a massive difference to your long term financial prospects.
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Find out more about declaring yourself bankrupt and what are the considerations you should take note of.
