When Should I File Bankruptcy?
Filing for bankruptcy is never an easy decision to come by. Most debtors will want to hang on no matter how financial distressed they are. At some point they will reach out and contact a bankruptcy lawyer to learn about all of their options, and then a few months after that they may throw in the towel with battling their creditors and file for bankruptcy. The point is that if debtors would just realize their problems will not just go away and file for bankruptcy earlier they would probably save themselves a lot of time and grief. If a debtor qualifies for a chapter 7 bankruptcy they can get rid of all of their unsecured debt without ever having to make a payment. Deciding not to file for bankruptcy will lead to lawsuits, unwanted phone calls, and even garnishments. Garnishments are usually the lynch pins that set people off to go seek out a bankruptcy attorney, however if these debtors planned ahead, it would have to get to that point of living in fear and needing to take immediate action.
Once a default judgment is entered for a debtors failure to respond to a legal complaint, a garnishment may be obtained. After a default judgment s entered it is very difficult to obtain a favorable debt settlement. If a default judgment has not been entered, then you may be able to obtain a settlement of between 25-50% of the total debt. This strategy can work if you a debtor with an income who can contribute funds to settling these debts as most debt collectors will only take lump sums as payment. These debt collectors can be put off for several months or years in order to obtain funds for a settlement, but eventually they will probably take some legal action in order to eventually obtain a garnishment. Debt settlement is usually the best option for those with large incomes or those with valuable assets which may be taken and sold in a bankruptcy. The last option is filing a chapter 13 bankruptcy in which debtors must make payments for a period of 3-5 years.
If you if are still curious as to when you should file for bankruptcy, schedule your free consultation with Symmes Law Group today at 206-682-7975