Filing Chapter 7 bankruptcy may be a scary proposition. It’s not news: you can literally saves tens of thousands of dollars.

It’s also true that there are some reasons not to file. For one, some people look at bankruptcy the wrong way. If you file because of overspending, then continue, you may be stuck in financial problems again.

On the other hand, sometimes avoiding bankruptcy is a big mistake. Filing may seem like biting the bullet – giving everything you have away – but that too is the wrong mindset to have.  If you file Chapter 7 bankruptcy at the right time and for the right reason, you are taking advantage of a legal right given to you. Just as you are allowed to vote, you are allowed to file bankruptcy.

When should you file Chapter 7 bankruptcy?
This is a very common question, and the answer can be different for each person. However, we at Higgins & Associates advise you to file when it best serves your interests. If you have no way of paying back your debts in a 3-5 year period, Chapter 7 is smart. If you are only able to pay the interest on credit card debt, again it’s smart. Since no two situations are the same, consult with a lawyer. It may actually be better for you to file Chapter 13 bankruptcy to save your Texas home or nonexempt assets from foreclosure and creditors.

Why is timing important?

Timing is critical in filing any form of personal bankruptcy. With Chapter 13, if you file before foreclosure papers are filed on your home, you have just increased your chances of saving your home. On the other hand, if you have been getting ten or more creditor calls a day, if every day is more bills, and if you fear you will lose everything, Chapter 7 is smart.

Sometimes you want to wait to file. If you are expecting a large bill to come in the mail, such as a medical bill you have no way of paying, you should likely wait after consulting with a lawyer. If you make too much money, but just lost your job, waiting may be required in order to be eligible for Chapter 7 bankruptcy. Remember that Chapter 7 is dependent on how much you make in the past six months in comparison to the Texas median income. If you have a high income for some time, then no income, once you’re average for six months is below the Texas average, you can file Chapter 7.

Getting Legal Expertise
These decisions are all unique based on your situation. If you are making a plan for filing, include a lawyer in your strategy. He or she can be invaluable in protecting your assets, saving you money, and getting a fresh start financially.

Preparing for After

You can be free of huge debts hanging over your head. Yes, filing bankruptcy more than once is allowed, but with Chapter 7 you have to wait 8 years. That means you have to manage your money as best you can in that time. But it’s much easier without tens of thousands in debt and creditors calling every day.