Posted on July 15, 2009 at 12:40 am Somebody told me that the best approach for someone who is in serious debt is to...do nothing. He said that you can't go to jail for being unable to pay. The creditors can't go after you if you really don't have anything to give. I thought that that was amusing, was he telling the truth? Anyway, and even so, I'd like to be able to get out of debt the clean way--if I can afford it. When is the best time to file bankruptcy? I know that I'm already broke even if I haven't filed yet. I want a fresh start that's all. Thank you in advance.

Posted on July 15, 2009 at 12:49 am Funny as it sounds, or rather ironic, your friend was telling the truth...except for taxing agencies and student loan lenders--the creditors must first sue you before they can go after your money and/or property. They must first obtain a judgment against you before they can touch your valuables.  There is also what they call "default judgment" in which, after the creditors have personally served you with a summons and complaints, and in 30 days-you weren't able to respond...then your properties cease to be untouchable. So to answer your question, What is the best time to file bankruptcy? I should think that when and if you receive a court summons or before that.

Posted on July 15, 2009 at 12:53 am Would the creditors sue somebody that's clearly living in poverty? I thought you said that what my friend said was not a lie...also, how would being forced into filing bankruptcy save me from the creditors?

Posted on July 15, 2009 at 1:12 am Well if you really do not have anything then you are what they call a "judgment proof"-- they'd leave you alone for a time, or forever,- but if by some miracle your fortune has changed, then expect them to attempt collection again. I'm not a lawyer by the way..just a concerned citizen;

Posted on July 15, 2009 at 1:16 am That's certainly good to know! Thank you, and wait...I just remembered another thing that that friend of mine told me, he said that - so you're broke and in serious debt, you have nothing, you want to file bankruptcy, cause you think that it's the best time to do so, bad news, it's not that easy anymore, maybe you won't even qualify for it. What does he mean by that?

Posted on July 15, 2009 at 1:51 am Your friend was probably referring to how to qualify for bankruptcy. There are two types available for the individual filer (or married) and there are bankruptcy types for businesses too. It used to be that consumers can just file for a Chapter 7 bankruptcy, but in 2005, when the bankruptcy code was amended, consumers would have to qualify for it via the means test (it is a major provision in the new bankruptcy law which is an income-based determination test: the current monthly income should be higher than the median family income in his or her state) Chapter 7 is also for consumers with no steady income. If you fail the means test you would have to file for Chapter 13 instead.Most consumers file under Chapter 13 reorganization bankruptcy in which a consumer has to submit a repayment plan to the court and follow it through for 3-5 years.But you know, there are alternatives to bankruptcy...which should also answer your question: When is the best time to file bankruptcy?File bankruptcy when you are absolutely sure that you've explored the alternatives to which.

Posted on July 15, 2009 at 2:08 am When is the best time to file bankruptcy questions to ask yourself:-Is it very hard for you to make even just the minimum monthly payment on your credit cards?-Do you have skip bill payments sometimes because you need the money to  buy basic needs like food and gas?-Are you getting creditor/collection calls? -Are you frequently using credit cards to pay for living expenses (rent, mortgage, electric, groceries, etc) -Have you tried debt consolidation but can't get approved for the loan? -Are you unsure how much money you actually owe?

Posted on July 20, 2009 at 11:29 pm This is just me, but why file bankruptcy if you have various other options, like debt consolidation? I guess if you aren't qualified for a consolidation (which is highly unlikely), then that's the time that a consumer should consider filing for bankruptcy

Posted on July 21, 2009 at 1:48 am I believe the best--and only time for an individual to file for bankruptcy is when they have exhausted all possible options on debt consolidation and still are not able to pay for their debts. Consolidating debt also entails having to make payments on a certain degree, especially if you have hired the services of a for-profit company. Do it yourself debt consolidation is a viable option and can be done for free, but at times not all creditors are always willing to make negotiations.

Posted on July 26, 2009 at 3:10 pm Heres a thought, after the wife gambled 100k away, and other debts, yeah I did the banko. Best thing going. Well wife bipolar, and threw me in jail few months back. So, maxed the cards out, quit payment on the house, and doing another banko. Its been 14 years since the first so no problem. If coprations can do it all the time why cant I.