When facing tough personal finances, it is natural to wonder whether having a problem paying the bills next month qualifies a debtor for bankruptcy. This possibility may occur although a debtor is momentarily able to pay the personal bills for the current month.
A debtor should seriously consider filing for bankruptcy when facing an inability to pay personal bills. Bankruptcy laws don’t take into consideration whether a debtor is current or not current in paying personal bills. A bankruptcy court:
- Does instead consider what the debtor’s income and expenses are to decide whether Chapter 7 or some other chapter should be filed.
- Next is going to see if all assets and creditors have been listed by the debtor.
- Then will send a notice to creditors about the bankruptcy filing.
The trustee is going to decide if there are assets that can be liquidated for the benefit of your creditors. Sixty days will elapse in a Chapter 7 bankruptcy. If nobody objects to the debtor’s bankruptcy, the court will discharge all debts, and creditors won’t be able to seize the debtor’s post-bankruptcy earnings or assets in order to pay down creditor claims.
Whether or not the debtor is current on paying personal bills at the time of filing for bankruptcy is not a factor. That’s why it is so important to talk with a bankruptcy lawyer while still current with bill payments. Doing so makes financial sense for considering whether to file a bankruptcy case or to continue to struggle to pay bills.
If you have questions about whether or not you qualify for bankruptcy, please pick up the phone and call me at 410-484-9000. I’d love to hear from you.