Am I filing Chapter 7 too early?

[jefferino]

I am one month behind on all credit cards (total is $70,000) and one month behind on 2 rental properties. September will be the 2nd month of non-payment.

I have been reading a few posts in which others haven't filed until after being sued and getting a judgement against them.

Is there a "strategy" to waiting?

[wonderingrov]

Each situation is unique, so the decision as to timing is unique with each filer. Some hold off filing to put distance timewise between them and last use of credit, or to qualify for a chapter 7 income-wise. On the other hand, some file earlier so they don't have to deal with the hassle of collection calls, or to avoid judgments.

Ultimately, you have to look at your reasons for filing and determine from that what works best for you as far as timing.

[tcreegan]

Waiting Reasons

Hello jefferino,

Some folks are recently unemployed/rec'd a bonus/rec'd some other income and are waiting for 6 months of low income to file. (You avg the last 6 months on the means test)

Some folks have transferred property or paid a large sum to a family member ('insider payment') and are waiting for that to be 12 months in the past.

Some folks have charged up something or taken a cash advance and are waiting 90 days or more so it doesn't look like they got something then filed BK right away (fraud).

Other people stop making debt payments and use the $$ savings to start rebuilding their post-BK life.

These are some of the major reasons people wait to file, but the most important pre-planning item is to shop around for attorneys. Most offer a free consultation, take your income, asset, debt info and find somebody you are comfortable with and confident of their abilities.

And of course there are many good answers here on the forum !

Tom in Colo

[tay666]

The reason we waited so long is we couldn't even afford an attorny.

The only other reason not mentioned that I can think of, is if you expect there to be more bills coming.
Say for example some kind of medical condition.
If you know there are going to be more medical bills in the next year or so, you may want to put off filing unitl those can be included as well.

If you don't have a reason to wait, then I wouldn't wait.
Get it done and over with, and put it behind you.

[Freddy03]

I wish I NEVER waited. Worse mistake I made. I tried to play catch up every month and just threw money away.

I am not filing because of being sued and a recent judgment.

Good Luck to you

[ccsjoe]

I think Tom summed it up best. We filed quickly because of just the opposite, if we had waited another month we would not have passed the means test.

[angles]

One thing also to consider in the timing of your filing is the totality of your debt when it comes to consumer vs non consumer debt. With your current rentals the total of your mortgages count towards non consumer debt. If those properties foreclose the deficiency would be your only non consumer debt. But I echo the statements above, unless you have a specific reason to wait, the sooner you file the sooner you are on the road to recovery.

[ryan]

Another reason some file very quickly is because they don't want a long history of "lates' on the credit report and feel their after BK credit score will improve quicker that way.
...not saying thats true, just reporting what I've heard.

[Fallonedward]

We are waiting because of being recently unemployed and are waiting for 6 months of low income to file. I wish we could file sooner just to get it over with

[df04527]

dd is waiting because of a horse trailer she is thinking of xfer'ing to her dad.

[wonderingrov]

I was actually going to wait a couple of months longer to file to put some aditional distance between my last credit card charges and the filing date, just to be safe from objections from creditors. My lawyer questioned me in detail on those (citi and American Express), looked over the statements in question, smiled and said - "I don't see a problem with filing now - these were necessity charges for smaller amounts, and it's been long enough since the charges occurred that I can pretty much tell them to go to hell if they raise any objections."

Having a good lawyer makes all the difference in the world.

Sure enough, I haven't heard a peep out of them as of yet.

[bigtim6656]

if you filed before judgements and hits to your credit would that keep them from putting them on or getting a judgement post discharge?

[bigtim6656]

I agree, I wish I could have filed 2 years ago when I first meant my lawyer, but I had to wait on a house I transferd to my dad

We are waiting because of being recently unemployed and are waiting for 6 months of low income to file. I wish we could file sooner just to get it over with

[IBroke]

if you filed before judgements and hits to your credit would that keep them from putting them on or getting a judgement post discharge?

Post discharge, no creditor included in your BK is allowed to report negative information. And post BK, they can't get a judgement either. As soon as you file, you are covered by the "Automatic Stay". I'm not an attorney so I'm not sure if they could "technically" obtain a judgement (let's say, in case you ignore the notifications by the court). What I do know, however, is that the filing itself is the legal protection to stop any judgement (in the making) against you. If you are notified about a suit against you, answering with the proof of filing would certainly stop the case.