What Will Happen If I Don’t File For Bankruptcy?
This may seem like a strange question, “What will happen if I don’t file for bankruptcy?”, but this post is aimed at those who are considering bankruptcy, may have had an interview or two with a lawyer, and then put it off.
When You Can’t Pay the Bills
Once someone has gotten to the point where they cannot pay their credit card bills, or make loan payments, they will often consult with a bankruptcy lawyer, who will go over their financial situation and recommend a course of action. They will also tell the potential client what the fee will be and what papers should be provided in order to complete the filing. The client will then go home and think it over, which is what he or she should do. Perhaps because it is such a major decision, or perhaps because the fees are hard to come by, there may be a delay that stretches on well into the future. Especially if the client has found a way to avoid the constant calls from the creditors, the delay may go on for quite a while.
Creditors Pursue You While You Wait
Meanwhile, behind the scenes, the creditors are not giving up. They are calling you constantly. If you have changed the telephone number that they had, you will not have to deal with the constant telephone calls. However, you will be getting constant mail from your creditors about your unpaid bills. Resist the temptation to just shred them or throw them away. Save them, because they are like gold to your bankruptcy attorney when you finally decide to file. Even if all you do is throw them into a large bag unopened, do not throw them away.
When You Stop Paying on a Credit Card
When you stop paying on a credit card, you will first be hearing from the bank’s internal collection apparatus, both by telephone and by mail. At first, the most unfriendly staffers will call you, simply demanding that you pay them. After a while, the matter is referred to callers who will seem to be more willing to listen to your problems and will try and work out a payment arrangement with you. This is sort of a “good cop, bad cop” type of arrangement. At some point you might even hear from callers who will try and make a deal for partial payment.
Collection Agencies
When the bank gives up, they then refer the matter to an outside collection agency, and the same process starts over again. You will get mail and calls from the outside agency, but the threats escalate, including threats to sue you. Again, save all the mail for your attorney.
Creditor Takes You to Court
Finally, the matter is usually referred to an attorney whose job it is to sue you in court for the unpaid bill. Some attorneys have their staff call you first to try and make arrangements for payment, and some attorneys file suit first. Again, save everything.
Taking the Phone Off the Hook
For someone who has disconnected the old telephone number, and who can ignore all the mail, it may seem, for several months, as if nothing much is happening, but when they finally get sued, things can happen quite rapidly. Once the lawsuit is filed, and a judgment is issued, your bank account can be seized and your wages garnished. It is often at this point that someone finally decides to go through with the bankruptcy. I often get calls from people who just found out their bank account was frozen and they do not understand why. Their rent doesn’t get paid because the account is frozen, and their next paycheck is going into that account and will be unavailable. It is a real crisis which could have been avoided had they filed earlier.
Bankruptcy Protects You From Creditors
It may take a while to finally decide to file bankruptcy, and it may take a while to pay the fees needed to file, but delaying the filing too much can cause problems. Think about what is best for you, and when you do decide to file, begin the process. Most lawyers will let you pay the fees over time, so the earlier you get started the sooner you will file and be protected from your creditors, for this is the whole purpose of bankruptcy.
