If you are contemplating bankruptcy, you might want to consider delaying the filing process for your own advantage. Waiting to file for bankruptcy may be advantageous when:
- Recent High-Income: if your recent income has been higher than normal, delaying your bankruptcy process will allow you to have more options. High-income individuals may only be eligible for Chapter 13 bankruptcy. Waiting for your income to go down may put you in a position to qualify for Chapter 7 bankruptcy. Keep in mind that the difference between the two chapters is that the Chapter 13 bankruptcy will require to you repay a portion of your debt over 3-5 years, whereas the Chapter 7 will allow most of your debt to be discharged.
- Nonexempt Property: In the case that you have a lot of non-exempt property (property vulnerable to be taken by the bankruptcy trustee), you should delay filing for bankruptcy so that you have time to sell your non-exempt property. This will allow you to benefit from your own property rather than the creditors.
- Anticipating New Debt: If you anticipate large bills in the future-i.e.-medical bills (including dental work, optional surgery, or routine check up), it is best to wait so that you can include the new debt as unsecured debt that will be discharged. A Chapter 7 bankruptcy will discharge unsecured debts incurred prior to filing for bankruptcy.
- You Are "Uncollectible": A creditor cannot come after your wages, bank accounts, or home unless they sue you in court and win. Many times the costs of bringing suit are too expensive. Creditors may choose to label you as "uncollectible" and write-off your debt. You are a strong candidate if you do not own any real estate, any assets, and are not a W2 employee (self-employed or unemployed or living off social security).