When is it time to file bankruptcy?
How do you know when it is time to file bankruptcy? In this blog post, I would like to illustrate some examples of when filing bankruptcy is urgent and when it is not.
Urgent Bankruptcy Situation #1
If your house has been scheduled to foreclose, do not make the mistake of waiting until the last second to file. Many times, a bank will tell a consumer that they will soon be getting a loan modification to stop the foreclosure. Then, the bank calls the night before the foreclosure and says, “I’m sorry but your loan modification has not been approved.” The next day, your house gets foreclosed. If your house has been scheduled for foreclosure, call me immediately. Let’s sit down and review your entire economic situation. Believe it or not, there are some situations where it is best to let the house get foreclosed.
Urgent Bankruptcy Situation #2
Your car creditor has called and said he is going to repossess your car. When they say this, they are not kidding. Filing Chapter 13 stops an automobile repossession. Get into my office as soon as you can. Even if the car has already been repossessed, we can get it back if it was financed and the creditor is still is possession of it. However, there are some situations where it is too late to get the car back. Your best course of action is to get your bankruptcy filed before any repossession takes place.
Urgent Bankruptcy Situation #3
When you have been served with a collections lawsuit, you are being set up like bowling pins in the alley. Once the creditor obtains a judgment against you, they are going to bowl you over by seizing whatever money you have in your checking account or by garnishing your wages. Even if a garnishment has already begun, you can still get relief by filing bankruptcy. Again, you can save yourself a whole lot of grief by not waiting too long.
Are there examples when you are in a position to wait to file bankruptcy? The answer is yes.
Not An Urgent Bankruptcy Situation #1
When you receive a nasty call from creditor, this does not always mean you must file ASAP. For example, let’s say you have a credit card collector who is demanding payment and not being very nice about it on the phone. They have to file a lawsuit before they can garnish you. You still have time to see if you can work out a repayment plan with them.
Not An Urgent Bankruptcy Situation #2
You have no significant assets in your name and your only source of income is social security. Medical creditors and credit card collectors cannot garnish social security checks. For more on this, click here.
Not an Urgent Bankruptcy Situation #3
Just because you have received a collection letter from an attorney, this does not mean that they have filed a lawsuit against you. Just because they threaten to file a collection lawsuit against you does not mean that they will necessarily do so. In Georgia, you know for sure that a lawsuit has been filed against you when the local sheriff pulls up into your driveway to serve you the papers.
In conclusion, don’t panic! Go see a bankruptcy attorney as soon as your situation demands. If you have an urgent situation, make sure you explain this to the receptionist. Urgent filers tend to get moved up to the top of the bankruptcy attorney’s schedule.
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