In financial matters, one of the worst things you can do is be hasty. Financial matters require a deft hand and a keen eye. Here are a few steps you can consider before taking the truly life-altering step of bankruptcy. You can even consider a few other options like an IVA or a DMP.
Consider a Short Delay
Sometimes, it can be beneficial to wait before actually declaring bankruptcy. You can avoid losing valuable assets, or keep from going straight back into debt again by waiting a relatively short period before filing. You might not know what the future might hold. So don’t rush. Let a credit counseling service guide your decision.
Consider Your Recent Income
If you recently had a high income, then you need to take another look at your bankruptcy situation. This is because when you file for bankruptcy, the court looks at your monthly income. The monthly income is determined by averaging it over the past six months. If you’re considering filing bankruptcy, but you recently had a high income from a job you lost, it may be prudent to wait a few months until your six-month average income decreases.
Consider the Monetary Value of Your Assets
When you file bankruptcy, the court will take your non-exempt assets and sell them to pay your creditors. In this case, you’ll probably get more money if you sell them yourself. You’ll be able to pay down more of your debt than the court would, or you can spend the money on reasonably priced exempt assets. Don’t attempt to hide any money, though, or you’ll get in trouble for giving assets away the court could have sold.
Consider Your Debt Status
Once you submit your bankruptcy petition, you won’t be able to add to the list of debts you’re having modified or discharged. So if you expect a large, unavoidable expense in your future, consider waiting until after you incur it to declare bankruptcy. This way, you can include those bills on your bankruptcy petition.