The Best Bankruptcy Tricks That Really Work
Maximizing effectiveness when you file for bankruptcy is all about submitting the paperwork at the right time. Waiting too long can allow your creditors to outmaneuver your position and continue with collection practices after your bankruptcy finalizes. File too soon, and you lose valuable negotiating time to get better rates and cash-friendly discounts. What are the tricks? When is the best time to file? Lucky for you, our Philadelphia bankruptcy lawyers are in the mood to reveal their secrets. is it magic? Sort of.
Married and what to Keep Your Home?
Just because you do everything else together, does not mean you must file Chapter 7 bankruptcy jointly with your spouse. In fact, if both your names are on the mortgage, it makes all the sense in the world to file separately, and at different times. The automatic stay – the court provision that stops all creditor actions against you – only last for 90 days in Chapter 7, but you can extend that to up to 180 days, if your spouse files for protection when your automatic stay is due to expire. That keeps the bank’s hands off your home for six months and provides more time to get your finances in order.
In Chapter 13 bankruptcy, the automatic stay can last for three to five years; a fact that might mean only you or your spouse need file to keep your home. Regardless of the bank’s objection, you’ll have all that time to bring the home loan current under your court-approved repayment plan.
Negotiating a New Promissory Note
Once you file for bankruptcy, the court voids the promissory note on your home loan, but not the obligation to repay the mortgage. You still owe a debt, but the details of how that debt is paid are gone – unless you wait. The overt threat of bankruptcy may make a mortgage lender more willing to renegotiate the promissory note for more favorable repayment terms. If the lender is sill unwilling to refinance or make adjustments, file for bankruptcy with the help of our attorneys. You’ve already done enough work on your own.
Watch out for Temporarily High Income
If you’ve been raking in the cash lately, you might want to wait a few months before filing for bankruptcy. The court considers your most recent income when determining your ability to repay the debts you owe, which means a banner couple months before filing (a blip on your financial radar) could ruin your chances of expunging debts you really can’t afford to pay long term.
Filing before your income returns to normal can make you ineligible for Chapter bankruptcy, and could force you into Chapter 13, which requires a repayment plan – one that could seem feasible in the short-term, but put you on the ledge of financial catastrophe in the future.
If you, or a loved one, are experiencing significant financial difficulty, bankruptcy could be the best solution to ease the pain and get a fresh start. Call our attorneys today for an immediate consultation with our experienced legal professionals.