It is human nature to leave things until the last minute or procrastinate until you absolutely must take action. Unfortunately consumers tend to procrastinate themselves out of thousands of dollars that they might otherwise have been able to keep in their pocket had they consulted with a bankruptcy attorney early on in a financial hardship. For instance, did you know that when you file for bankruptcy, retirement funds are completely protected from your creditors? Many people view filing for bankruptcy as a last resort and will do anything they can to avoid it. While that is noble, many people drain their savings and retirement accounts that could have been retained in their efforts to pay down debt. Furthermore, many consumers tend to check out companies that market themselves to consumers and adverse that they can make you debt free by negotiating settlements on your debts, which may make sense for some people and is something this law firm offers, but it is not the right choice for those living pay check to pay check most likely. The problem with these national debt resolution companies is that they fail to educate consumers on what to reasonably expect out of a debt resolution program. For example, did you know that you may need to pay taxes on any debt forgiven that is $600 or more, or you may actually be sued by debt collectors while you are waiting to accumulate enough funds in your 3rd party trust account to negotiate a settlement, and finally the company you hire may charge a hefty fee of 15% of your total debt or more to negotiate the settlements of your debts, and then how much are you actually saving. With all that said, the most common reason debt settlement may not make sense for most people is that they cannot keep up with the monthly payments or pay enough into the plan if they get sued by a debt collector and then they end up turning to bankruptcy anyways, when they could have saved time and cost from the outset by seeking out a bankruptcy lawyer to discuss options at that time.
After I meet with somebody for a free bankruptcy consultation, I might not hear from them for a month, 6 months, or even over a year. The reason that I usually get for why it took them so long to call me is that they were trying to take care of the problem on their own and make things work as is. However in the meantime these people have had judgments entered against them, garnishments started or even have had liens placed on their home which all could have been avoided. Also for people with higher incomes who have to file for chapter 13 bankruptcy, they need to realize that there are debt limits for secured and unsecured debts. Waiting to file for bankruptcy can compound debts by the interest owed on the accounts which can in turn make somebody no longer eligible to file for chapter 13 bankruptcy, essentially eliminating their chance at gaining relief from their debts through bankruptcy. Therefore waiting to file for bankruptcy may not make sense which is why you need to understand what your options are from the outset.
For others it may make sense to wait to file a bankruptcy. Some common reasons to wait to file for bankruptcy may be that in order to qualify for a chapter 7 bankruptcy or have a lower payment in chapter 13 bankruptcy, your income needs to be lower than what is at currently based on your last 6 months of income or you may need to put more time between the transfer of an asset or charging a credit card to avoid any kind of objections to a bankruptcy filing for fraud or the loss of an asset. This is true also if you have paid a friend or family member back for a debt in the last year or perhaps you need to wait until you have lived in Washington State for 90 days to file a bankruptcy case in Washington state.
The fact of the matter is, there is not a once size fits all bankruptcy and everybody’s case comes with a different set of facts and needs. While one person may need to file a bankruptcy case right away for best results, another may need to wait several months before filing a bankruptcy cases for the reasons discussed above. So can you afford to wait to file for bankruptcy? The answer is it depends on your personal circumstances and you should seek out professional advise before taking any action in your case or with your finances as your actions could impact what you can or cannot do with regards to debt relief and they may result in costly damage control which could affect you for years to come.