When Is The Right Time To File For Chapter 7 Bankruptcy In New York

A question I contuniously get from clients in my New York office is “When is the right time for Bankruptcy in New York”.  The question is really a very personal one.  It depends on you, your family, and your life situation at the present time.  If you’re like many people out there, you may be struggling to make ends meet.  If you’re also like some people out there, you’ll have at least some small amount of savings put away.  When you begin to realize that you’re using your savings and it’s not doing anything to minimize your debt; that it in fact is simply letting you pay your minimums on your cards and let you “float” for another month, thats a hint that you may want to consider filing for Chapter 7 Bankruptcy in New York.  The thing I hate to see most is clients going through their IRA accounts and 401(K) to pay minimums towards cards that they will never repay.  It’s a waste of money.  Furthermore, if you find at the end of the month that your credit card payments are causing you to be late on your mortgage payments or car notes, that may be a point where you might want to consider Bankruptcy.  Lastly, if you’re income is likely to rise shortly (and Mazel Tov to you, because my friend, you’re one of the few) you want to consider filing, as there are certain income limits on when you can file for a Chapter 7 Bankruptcy.

Lastly, I think its critical to discuss the current times we are in, and some lawyers wont discuss this with their clients when talking about Bankruptcy.  Look the most realistic picture is that our economy is going to be in a rut for some time to come.  Were looking at potential double digit unemployment, salary freezes, declining home values, and the rest.  The best (and perhaps only) way to deal with this crisis is to plan accordingly.  If you have 50k in debt and about 20k in savings, think long and hard about using those savings to pay the debt down.  If you’re in a home you cant afford even WITHOUT paying your credit cards, think hard about the situation your in and try and plan your way out of it.  I realize more than many people understand that there is this odd “stigma” associated with filing for Bankruptcy.  While I do understand that it seems like a “big step” it may be the only way to actually remedy the financial situation you’re in.  We can always help answer your questions.  Its simply a personal choice though, as to when to ask.

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