The Consequences of Waiting to File for Bankruptcy

Posted on November 26, 2018 at 12:00pm by
Photo of a Wall with Red Chairs Lined up Along It

Are you receiving frightening phone calls and letters from collection agencies? Are your wages being garnished? Have creditors threatened to seize your property? If this sounds familiar, then you should strongly consider reaching out to a bankruptcy attorney for help.

Even though our phone consultations are free, bankruptcy’s stigma makes people avoid reaching out to ask questions about their financial options.  There are lots of rumors about bankruptcy too, and so many people misunderstand what happens to their credit, finances and personal opportunities if they file. But bankruptcy is a way to protect credit, improve financial standing, and open doors of opportunity that are squeezing shut.  We’ll be honest with you if bankruptcy is going to help you protect your financial future and assets, or if it isn’t.

Loss of property and assets

Creditors could attempt to seize your assets if you have fallen behind on payments. For instance, creditors may target your paycheck by securing a judgment to garnish your wages.

How can bankruptcy help? When you file for bankruptcy, an automatic stay is issued that will prevent most creditors from seizing your assets. You may be able to save your home, vehicle and other assets by filing for bankruptcy. We encourage you to read our pages on bankruptcy exemptions and Chapter 13 bankruptcy to learn more about this topic.

Damaged credit scores

Bankruptcy can affect your credit scores, but waiting to file if you are behind on paying your debts can damage them significantly. Defaulted debts and late payments are reported to the three credit reporting bureaus. By filing for bankruptcy, you can potentially discharge the debts that are causing you problems. This will make it easier to rebuild your credit.

After your case has concluded, you can begin rebuilding your finances with a fresh start. Many of our clients are surprised by how quickly they can improve their credit scores after bankruptcy by making payments on time and showing financial stability.

Loss of your business

Are you a business owner? Chapter 11 bankruptcy could help your business maintain control of operations while eliminating cumbersome debts. However, your business could face major consequences if it waits to file. Much like in a consumer bankruptcy, creditors may attempt to collect on their debts by going after your business assets. An automatic stay can help prevent this scenario from unfolding.

We have written numerous blogs on the benefits of Chapter 11 bankruptcy. You can learn more about Chapter 11 benefits by reading these blogs.

No peace of mind

The signs that a person needs to file for bankruptcy often include emotional and behavioral indicators: losing sleep worrying, getting new credit cards to pay for old ones, avoiding opening mail or answering the phone in case it’s a creditor. In our experience, the most difficult part of the bankruptcy process is picking up the phone to ask for help. However, we also are very familiar with the relief—or even joy—that comes after potential clients learn more about the options that best fit their personal situation.

Contact Our Kansas City Bankruptcy Law Firm

At The Sader Law Firm, we tell our clients that bankruptcy is for people who have something they want to protect. If you want to learn how bankruptcy can help resolve your financial situation, then we encourage you to call us at (816) 281-6349. You can also use our online case review form to set up an appointment.

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