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  1. #1
    Join Date
    Apr 2015
    Posts
    12

    Default When Should You File for Chapter 7 Bankruptcy

    My question involves bankruptcy in the state of: CA
    i am planning on filing a chapter 7 BK. but i am wondering if i should wait until i am being sued or should i flat out do it it will be a quick no asset case

  2. #2
    Join Date
    Mar 2013
    Posts
    16,791

    Default Re: Should I Wait

    Too many things can go wrong between the time the lawsuit is served on you and the time all your papers are ready to be filed with the court.

    If you are going to do it anyway I suggest you do it while you still have some control over the time it takes to put all your paperwork together and not wait until you have to scramble and risk a creditor seizing assets (wages, bank accounts, etc) as a result of a judgment.

    Take a look at the forms that are needed and you'll see what I mean by time consuming:

    http://www.uscourts.gov/forms/bankruptcy-forms

  3. #3
    Join Date
    Sep 2010
    Location
    Florida
    Posts
    153

    Default Re: Should I Wait

    Yes do it now. Waiting until a suit is filed will also mean you will have to deal with that lawsuit and the (assumed) judgement that goes with it.

  4. #4
    Join Date
    Sep 2015
    Location
    Los Angeles
    Posts
    1

    Default Re: Should I Wait

    Before filing for bankruptcy, it would be beneficial if you sort out your debts or create payment plans with creditors. Search or explore alternatives to negotiate with creditors.

  5. #5
    Join Date
    Sep 2015
    Posts
    6

    Default Re: Should I Wait

    If you are only filing because of this one thing, then I'd wait to see if they sued me. You can still take bankruptcy after you are sued. It takes literally a day to get your papers together and your lawyer can do up your means test in another day. As long as you do it when you get your summons you will have about a month before you go to court. As soon as you file there is an automatic stay issued and the lawsuit cannot go on. Even if you waited, let the judgement be entered against you. DO not agree to an "agreed judgement" and then file because you can't discharge agreed judgments. You can file after a judgement is issued by default, and it can be discharged if you didn't agree to the judgement. But there's no reason to wait that long, your lawyer can get you fixed right up in a couple days tops.

    Also, you better figure out now if you would qualify for a chapter 7 or a chapter 13. If you think you'll get a raise, file now. You want to avoid a 13 at all costs unless you want the trustee to take all your disposable income from you for five years, including tax refunds. And if you get any money, win a lottery, inherit anything in the 5 years, you have to give it up. So, before I'd let someone force me into a situation where I had to take bankruptcy, I'd check out my state and see if your income is under the median on the bankruptcy means test. If you make over the median for the means test, you need to talk to a lawyer today to discuss your options. Also, even if you pass the means test and can file a 7, if you have a lot of disposable income, you still might be forced into a 13. It's hard to take a 7 today, so you better be sure you actually can take it, before you rely on that.

    People are acting like they will just get a judgement if you wait. No, you'll get a summons first....you'll have plenty of time to get your lawyer to handle that for you.

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