Your income is going down. File Later!
Bankruptcy law requires that your income be an average of what you earned during the past 6 months. If your income is going down, the past 6 months does not accurately reflect how much you have available to pay debt today. As a result, you may not qualify to file Bankruptcy right now, or if you do qualify, your required payments in a Chapter 13 will be higher than if you wait.
Although you have a lot of debt, you believe it still might be possible to pay it off. File Later!
Until you believe you have no choice other than Bankruptcy to eliminate your debt, don't pursue a Bankruptcy. You will never be happy & you will always kick your self for having done this!
Phone calls from your creditors don't really bother you, or you stopped receiving harassing calls. File Later or not at all!
Filing a Bankruptcy can stop creditor harassment, but if you don't have a problem receiving collection calls, you might be able to slip through the cracks, never having to pay and never having to file Bankruptcy at all!
You have recently used a large amount of credit. File Later!
Bankruptcy law allows creditors to object to someone being able to eliminate a debt that was made up to 6 months before the bankruptcy was filed. Luxury purchases on credit, such as vacations, or purchases of expensive electronics, or any other use of credit over $1,000 can result in a creditor being able to successfully oppose someone from being able to receive the benefits of bankruptcy. Once you start to consider bankruptcy as an option to help you solve your financial problems, it is time to stop using credit no matter what. Otherwise, what you are doing is committing robbery using a pen instead of a gun!
No one has sued you to collect a debt. File Later or not at all!
Until a creditor sues you, they usually cannot garnish your wages, attach your bank account or place a lien on your real estate. Once a creditor does sue you, you will want to act quickly to protect yourself, but until they sue you, what can they do? They can only report negative information to the credit bureau.
Your income cannot be garnished because it only comes from retirement, unemployment, social security, or other sources which are exempt. File Later!
Since creditors are not usually able to collect money from certain protected sources (which are different in each state), if they can't collect, they usually won't even try to sue you because it is a waste of their time & money. This is what attorneys call being "judgment proof," meaning that if a creditor obtains a judgment, they cannot collect it from you. Of course, if you have assets that are not protected, creditors can seize your property or place a lien on it.
If you are late on your mortgage, foreclosure is a long way off, or you don't intend to keep your house. File later!
If you have a 2nd mortgage or HELOC, there could be tax consequences or even a lawsuit if the first mortgage forecloses. In some states, the 1st mortgage company can sue you if the property sells for less than the amount you owe. But foreclosure is a lengthy process, and you may still have plenty of time to decide whether to file Bankruptcy later.
You (or someone in your family) has medical problems and you expect more expensive medical bills in the future. File Later!
A discharge in Bankruptcy is only available once every 8 years. If you file and then continue to have large ongoing medical expenses you can't pay, you may be worse off after you file Bankruptcy because you no longer have the opportunity to eliminate debts with a Bankruptcy. In most states, you are responsible for paying for your minor children's medical debts and your spouse's medical debts. You are responsible for family medical debts even if you didn't consent to the medical treatment, even if it wasn't for an emergency, and even if you and your spouse haven't spoken in years. As long as you are married to your spouse, you may be financially bound by your wedding vows, which said that you took each other "for better, for worse, for richer, for poorer, in sickness and in heath." Many states have interpreted these vows to mean that you are responsible for your spouse's medical costs, no matter what.
You expect to receive a large tax refund in the next six months and are not willing to forfeit it. File Later!
In many areas of the U.S., the one asset you will have to forfeit to your creditors in a Bankruptcy is the cash from an upcoming tax refund. If it is a small refund, less than $1,000 or so, many Trustees will not bother with it & will let you keep it. But with the current tax system, many people receive tax refunds of $5,000 or more, and no one wants to have to forfeit this money to pay off debt. Wait until you have received the refund, spent it on living expenses, before you file for Bankruptcy.
You have extra income that you would like to use as you please. File Later or not at all!
You will not qualify to file a Bankruptcy if you have a significant amount of money left over in your budget that could be used to pay your debts. The exact amount you can have left over in your budget varies depending on how much you owe. If you owe a small amount of less than $15,000 and have as little as $70 available, you may be found to be ineligible to eliminate your debts in a Chapter 7. If you owe $25,000, you can have around $100 left over in your budget & still be eligible for bankruptcy. Anytime you have more money available in your budget puts you at risk for a challenge to your Bankruptcy as not being "in good faith." There is a high risk that your case could either be dismissed or that you would have to convert to a Chapter 13.