If you’re drowning in debt, deciding to declare bankruptcy may be relatively easy. Choosing between Chapter 7 and Chapter 13 bankruptcy, on the other hand, can pose a challenge, as can deciding when to actually file. After evaluating your financial situation, a seasoned attorney will help you determine precisely when to submit your petition. In the meantime, here's general information you should know. 

When to File Immediately 

Since bankruptcy proceedings can essentially halt any legal action that creditors have taken against you, it may be wise to file right away if you’re at risk of losing your home or vehicle. As soon as you submit the petition, the court will enact an automatic stay, which will provide at least some breathing room. However, whether the filing will be able to reverse the foreclosure or repossession entirely will depend on the circumstances and the type of bankruptcy you file. Generally speaking, those who want to retain their assets are advised to pursue Chapter 13 bankruptcy over Chapter 7. 

When to Delay Your Petition 

If you're not done incurring debt—for example, if you’re still receiving treatment for a medical condition—it may make sense to postpone filing. You should also delay your petition if you don’t currently qualify for the type of bankruptcy for which you wish to file, but will soon. Finally, you may want to wait if you recently made luxury purchases or paid off one particular creditor.

In Tennessee, credit purchases of more than $1,150 for luxury goods within 60 days of filing are not dischargeable. And if you prioritize paying back some creditors over others within 90 days of filing, the payments you made can be withdrawn and redistributed. 

Transferring significant assets to friends or loved ones prior to filing is also a red flag. If you try filing within one or two years of doing so, you could end up facing accusations of bankruptcy fraud.  

If you want to file Chapter 7 or Chapter 13 bankruptcy, turn to the Law Offices of Harry G. Lasser. Located in Cookeville, TN, this firm has been helping individuals and small businesses in the Upper Cumberland region regain their financial footing for nearly 20 years. To learn more about bankruptcy attorney Harry Lasser, visit their website. To schedule a consultation to discuss your situation and determine whether you qualify for Chapter 7 or Chapter 13 bankruptcy, call (931) 372-9988.