Many times, debts get out of control and they end up exceeding your income. When this happens, according to Minnesota bankruptcy laws, it may be time to file bankruptcy. Following are some reasons why you should file for bankruptcy now instead of later.
A bankruptcy grants an automatic stay- which means that creditors must stop harassing you for payment once they have been contacted. If you do have a mortgage, the mortgage holder may request the stay to be lifted so that they can foreclose, but it will at least delay that process. Other reasons to file include:
- Unemployment for an extended period of time/little to no savings: if you barely have the money to pay basic living expenses, you definitely can’t pay your debts.
- Foreclosure: the automatic stay will halt the foreclosure process, which will give you time to catch up- or at least time to find another home.
- Eviction: the automatic stay will halt the process, but once a judge has granted the eviction, the bankruptcy will not prevent it from happening.
- Repossession: the automatic stay will prevent the repossession from happening and give you the time that you need to catch up.
- Wage garnishment: the automatic stay stops all wage garnishments.
- Lawsuits for delinquent debts: the automatic stay stops all lawsuits from proceeding.
- About to start/recently started new job that pays more: if you wait until you start a new job, you may not qualify to file bankruptcy.
- Expecting to receive property: if you receive the property after the process has been started, it will not be considered part of the bankruptcy. However, if you receive it before, the courts can consider it part of your assets and use it to pay off your debtors.
- Moving to a new state with less exemptions: you must file where you have your drivers license and your car registered. If you’re planning to move, check out the bankruptcy laws in both states to learn more about exemptions.
Of course, while there are lots of reasons that you should file for bankruptcy now, there are also plenty of reasons why you should not.