Why You Should File For Bankruptcy Sooner Rather Than Later
Posted on: 23 June 2016
If you find yourself overwhelmed with debt and have decided to file for chapter 13 bankruptcy, the next question is when you should file. The longer you wait, the more stress you're likely to face. If they haven't already done so, creditors will begin collection actions against you. If you're behind in your mortgage, you may face foreclosure. Here are some good reasons to contact an attorney and begin the bankruptcy process right away.
Bankruptcy Filing Stops Collection Activities
When you file, your attorney sends notices to your creditors that you have petitioned the court for a bankruptcy. All of your creditors must stop any current collections activities against you. They also cannot start new attempts to collect on the debt. This will stop the phone calls and notices from coming in the mail. It also stops persistent bill collectors from contacting you.
Judgements Cannot Be Brought Against You
Creditors cannot sue you for payment once you've filed for bankruptcy. If you currently have any judgements against you, your attorney will speak with them and have the action suspended.
Some Debt May Go Away Once You've Filed
With chapter 13 bankruptcy, the court will set up a plan for you to pay all or part of your debt. When your creditors are notified that you have filed with the court, they must wait for the bankruptcy to be discharged to find out what payment they can expect from you. If a creditor suspects that you will be paying only a portion of your debt with them, they may write off the balance to get it off of their books.
Foreclosure Actions Must Stop
As soon as you file, any foreclosure activity by your bank or mortgage company must be suspended. You'll be able to stay in your home while you wait for the bankruptcy to be discharged. If the bankruptcy is approved and a payment plan is developed, you may be able to keep your home as long as you can keep up with the mortgage.
Another option while the foreclosure is suspended is that the court can try to sell your home for you. A trustee will be appointed to your case and they will have you consider selling the home to make a one-time payment to your creditors. This may be your best option if, even after the payment plan is established, you won't have enough income to cover the mortgage.
File Now and Reduce Your Stress
The longer you wait to file, the more calls and notices you'll have to deal with from creditors. When a foreclosure notice gets put up on your home, you'll have the added stress of looking for a new place to live. Filing now will give you some relief from this stress. Once discharged, the bankruptcy will give you the chance to get back on schedule with paying off your debt so you can enjoy your life again.
For a bankruptcy lawyer, contact a law firm such as Hoffman, Hamer & Associates, PLLC.
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