Four Consequences of Waiting to File For Bankruptcy

Posted on March 12, 2020 at 10:06am by
Bankruptcy attorney

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 we recommend that you consider reaching out to a bankruptcy attorney for help.

The old fashioned notion of a stigma around bankruptcy keeps people from reaching out to ask questions about their financial options. Many people misunderstand what happens to their credit, finances and personal opportunities if they file. By the time they reach out to file, they have already suffered many of the negatives associated with a bankruptcy.  Fortunately, by filing bankruptcy, one can begin to move forward. Bankruptcy is a way to protect credit and improve financial standing. Depending on your situation, waiting to file for bankruptcy can actually hurt you. Below, our Kansas City bankruptcy lawyers explain potential consequences of waiting to file.

Loss of Property and Assets

Creditors could attempt to seize your assets if you have fallen behind on payments. For example, 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. An automatic stay will prevent most creditors from seizing your assets. You may be able to save your wages, home, vehicle and other assets by filing for bankruptcy. 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. However, 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.

A bankruptcy can discharge the debts causing you problems. This will make it easier to rebuild your credit.

After your case has begun, you can begin rebuilding your finances with a fresh start. On-time payments and showing financial stability can help you improve your credit scores after bankruptcy.

Loss of Your Business

Are you a business owner? Chapter 11 bankruptcy could help you maintain control of operations while eliminating 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 situation.

We have written many blogs on the benefits of bankruptcy, specifically the benefits of Chapter 11 bankruptcy. You can also reach out to our bankruptcy lawyers at (816) 561 1818 to discuss your specific situation.

No Peace of Mind

The signs that a person needs to file for bankruptcy often include emotional and behavioral indicators. These signs may include:

  • 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 are also very familiar with the relief that comes after potential clients learn more about the options that best fit their personal situation.

Contact Our Kansas City Bankruptcy Law Firm Today

At Sader Law Firm, we tell our clients that bankruptcy is for people who have something they want to protect. If you want to learn about the benefits of bankruptcy,  we encourage you to call us at (816) 561 1818. Our phone consultations are free. We will be honest about whether bankruptcy can help you protect your financial future and assets. You can also use our online case review form to set up an appointment.

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