If you are being pursued by creditors, at risk of losing your home to foreclosure, or facing vehicle repossession, filing bankruptcy can help by stopping all debt collection efforts IMMEDIATELY.
Deciding to file bankruptcy can be a tough decision. However, it should NOT be a decision of last resort. Too frequently, when people find themselves in a complex financial situation, they follow a downward spiral that starts with contacting a credit management agency and ends with a frantic call to a bankruptcy attorney:
1.Bills are piling up; credit card balances are growing every month.
2.A few calls from creditors grow into an avalanche of non-stop harassment.
3.A call to a credit management agency (that inevitably fails to resolve the debtor's credit problems).
4.Threats of lawsuits, repossessions, garnishments.
5.Internet searches for information on bankruptcy (without paying attention to a specific situation, jurisdictional differences, state-specific exemptions).
6.Notice of a foreclosure sale, repossession,
7.A frantic call to a bankruptcy attorney.
Often, when potential clients contact our firm, we advise them NOT to file for bankruptcy protection, or at least wait until they can take full advantage of exemptions, statutes of limitation, and other important timelines that will maximize the benefits and protections available to them in bankruptcy.
We make them aware that certain debts, asset transfers or purchases, sale of business, lawsuits, inheritances and divorces may affect their ability to discharge certain debts and even disqualify them from obtaining a discharge.
Unfortunately, it is virtually impossible to find this information by searching the Internet. Why? Because EACH state has a different set of exemptions that are available to debtors in bankruptcy. Because finding an excellent article on how to file for bankruptcy in California will do more damage than good to a Maryland resident. Because debtors may not be aware of certain factors that may drastically affect their ability to protect assets in a bankruptcy case.
Similarly, it is NEVER a good idea to wait until you HAVE to file. In our experience, almost every debtor could benefit from pre-bankruptcy planning. When we are faced with an impending deadline a foreclosure auction, a judgment, etc. our ability to maximize the benefits of bankruptcy (and there are many) may be limited.
To summarize, bankruptcy probably should not be the first option. However, contacting a bankruptcy attorney BEFORE your financial problems become unmanageable will give you an ability to make an EDUCATED decision about your financial future.