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In life, there’s a time for everything: A time to get married, a time to budget, a time to take out a loan and even a time to go bankrupt. Bankruptcy may seem like every debtor’s nightmare, something of the last resort that people have to undertake when all hope has been lost. It is, and it’s not at the same time. Some people save their fortunes by filing for bankruptcy at the right time. Others, not so much.
Like the end of the world, some debtors have to face a number of harsh realities all at once. For some unfortunate souls, terrible things, one of them bankruptcy, intersect at once. Here are the worst times to go bankrupt and how to handle these scenarios:
During a Divorce
In case you are wondering what could possibly get worse during a divorce, it’s filing for bankruptcy when divorcing. Some couples file for divorce citing bankruptcy, and others do it the other way around. In any case, divorcing and bankruptcy are two terrible things to undergo at once.
However, a surprisingly high number of people file for bankruptcy and divorce right around the same time. Divorce is often the result of awful finances. There are several ways the law allows divorcing couples to declare bankruptcy. These filings should be handled by a specialist local attorney, such as Scottsdale bankruptcy divorce lawyers.
Now, most wonder what to file for first, divorce or bankruptcy. It depends on the type of bankruptcy the couple wants. Chapter 7 bankruptcy allows certain types of unsecured debts to be written off when the debtors go bankrupt. Therefore, Chapter 7 filings can be handled and settled completely in two or three months. So, for couples who want to divide assets, it’s best to file for Chapter 7 bankruptcy before divorcing. Otherwise, divorce first, divide assets and file for Chapter 13 bankruptcy separately.
When There’s a Medical Emergency
No one wants to end up sick in the ER and face loans that are about to default at the same time. However, there are terrible instances when this does happen. Filing for bankruptcy while undergoing essential medical treatment is not something that anyone would want to do.
Bankruptcy ruins credit scores, and with that, it will be extremely difficult to obtain a loan to cover medical expenses. Therefore, when undergoing medical treatment, the best solution is to cite illness as a cause and ask for grace periods or extensions for existing loans. Most creditors consider humanitarian reasons and grant these.
When You are About to Start a New Business
Never, ever file for bankruptcy if you are about to start a new business. You will never be able to secure the capital that you need to start a new company. In this scenario, the best solution is to delay your business idea and file for bankruptcy. If this is absolutely not possible, find a reliable business partner, and use his or her good credit to obtain a loan. The latter is usually rare and requires a massive amount of trust.
As you can see, bankruptcy can go hand in hand with other disasters. So, don’t let it ruin your life completely. Consider the above suggestions for solving the situation, and always know that there’s a solution no matter how grim the problem is.
It really is never a convenient time to file for bankruptcy, but you are correct – some times are worse than others. I do recommend seeking the consult of an attorney who can review your case and let you know what your best options are. Most do offer a free consultation. Thank you for sharing.
Thanks for reading Laurie!