3 Instances When Declaring Bankruptcy Might Not Work
One of the biggest worries for bankruptcy applicants is failing to qualify. This concern is valid, considering the significant amount of time and resources involved in this process. The surest way to ensure success is working alongside a bankruptcy attorney. After assessing your situation, the legal practitioner will advise you whether to file or not. Besides, they will determine the most suitable time to file. Your legal advisor may recommend that you put off plans to declare bankruptcy if you're in the following situations.
You Have Earned a Lot of Money Recently
Usually, bankruptcy is meant for individuals whose income is insufficient to pay back their debts. Therefore, you may not qualify for bankruptcy if you have enough money to repay your creditors. For instance, the court will disqualify you if you've recently earned a lot of money. It is worth noting that the bankruptcy trustee takes a lot of time to check applicants' eligibility. If your bank accounts reflect huge payments, you might get a denial after rendering your application. Therefore, if you've earned money in the last few weeks or months, your attorney might advise you to shelve the idea. Then, you can wait until you're eligible to file.
You Have Sold or Transferred Assets Recently
Selling or transferring property before declaring bankruptcy could seem dishonest. Besides, the court will question your eligibility if you sell a property for less than the market price or transfer your most valuable assets. In that case, the court will assume you're lying about your financial situation. Consequently, it might dismiss your case or sell your property to pay back what you owe your creditors. Therefore, if you sold or transferred assets recently, it is best to wait before filing for bankruptcy.
Your Lender is Willing to Modify Your Loan Terms
It is also wise to halt your bankruptcy filing plans if your lender is willing to modify the loan terms. In this case, you'll need to seek the intervention of your lawyer. They will negotiate manageable payment installments, which you can pay without defaulting. Again, this will save you from going through the lengthy, costly bankruptcy process.
You shouldn't spend your hard-earned cash and valuable time applying for bankruptcy if you have low qualification chances. Therefore, discussing your case with a bankruptcy attorney before filing is advisable. Through their advice, you will know whether to declare bankruptcy or put off the plans until you're eligible to file.