What is the Best Time to File Bankruptcy in Arizona?

best time to file bankruptcyFor most people, financial hardships don’t accumulate overnight. As time passes, debt may grow and the number of creditors will increase until the sums become unmanageable. Even at this point, many individuals will refrain seeking an adequate solution to their financial problem.

Arizona bankruptcy lawyers get one common question a lot – how long should a person wait before doing a bankruptcy filing? The answer depends on several key considerations.

Are Debt Collection Efforts Becoming Aggressive?

Arizona creditors can be ruthless and relentless when it comes to debt collection. If you’re struggling under the weight of constant debt collection efforts, the time may be right to consider a bankruptcy filing.

At some point, a collection agency will become involved in the process. You may also find yourself being sued by creditors.

An Arizona bankruptcy filing puts an automatic stay in effect. This means that while you’re doing the filing, debt collection efforts have to stop. Even if you don’t get a bankruptcy discharge or you don’t qualify for a Chapter 7 bankruptcy, you will get a bit of time to regroup and consider the best debt management strategy.

Wage Garnishment and Income Problems

Those who are facing wage garnishment should also consider an Arizona bankruptcy filing.

Wage garnishment occurs whenever creditors start taking a portion of your paycheck to cover the sum you owe. According to statistics, 7.2 percent of employed individuals in the US will have to deal with wage garnishment at one point in time or another.

A bankruptcy filing makes it impossible for creditors to initiate wage garnishment procedures. Once the automatic stay comes in effect, you’re 100 percent protected. While you do have certain rights when wage garnishment is being considered, such an arrangement will diminish the amount of available income and it could contribute to even more serious financial troubles. In such instances, bankruptcy can be the answer you’re looking for.

Reasons to Postpone a Bankruptcy Filing

Generally speaking, it’s not a good idea to wait too long before you opt for a bankruptcy filing. If you’re already experiencing financial difficulties and you cannot manage debt, chances are that time will get you in even bigger trouble.

A few situations, however, make it reasonable to postpone the filing.

If you’ve just experienced a decrease in income, for example, you may want to consider holding off for a bit of time. To qualify for a Chapter 7 bankruptcy, you have to pass the Arizona means test. Your income over the past six months will be examined. If you received a higher salary previously, you will not qualify for a Chapter 7 filing.

Waiting is also a good idea if you’ve recently made big purchases or you’ve taken out a cash advance.

If you purchase a certain amount of luxury goods in the 90 days before the bankruptcy filing, you may be incapable of including such sums in the bankruptcy estate and getting a discharge for them. The same applies to a cash advance exceeding 1,000 dollars (from a single creditor). If you take out a cash advance 70 days before the bankruptcy filing, the sum cannot be discharged.

It’s also wise to wait if you’re expecting to accumulate more debt in the near future. If you’ve already done the bankruptcy filing and you accumulate new debt, that final sum will not be included in the bankruptcy estate. Thus, you’ll still be responsible for it even after you get a discharge.

As you can see, it’s difficult to tell how long you have to wait before doing a bankruptcy filing.

If you are struggling financially, talk to an Arizona bankruptcy attorney. Your lawyer will examine the individual circumstances and give you a better idea about the best timeframe for going through with the filing.

Find out is bankruptcy law difficult.