How Waiting To File Bankruptcy Can Hurt You

Waiting To File Bankruptcy

There are so many people that I talk to over the course of a month who contemplate whether to file bankruptcy yet take no action. Many of these people feel that the problem will simply go away. Some people feel that their financial situation is going to somehow change on its own. Others feel that the creditors will simply give up on their collection efforts. Others take affirmative steps which actually create more of a financial burden and stress then if they did nothing at all.

 Group One

Let’s look at the first group. These are the types of people that believe that if they just ignore the situation, everything will magically go away. Obviously, this is what we refer to as the ostrich burying its head in the sand. In other words, if you don’t pay attention to it, it must not be happening at all. This of course, cannot be further from the truth. These are the people that get hit with lawsuits, fail to appear, and then wind up being arrested for contempt of court. You definitely do not want to be part of this first group.

 Group Two

Let’s look at the second group. These people feel that their financial situation is on the verge of changing on its own. For some, it may be the hope of finding a job or improving to a better paying job. For others, it’s a future winning lottery ticket or a successful night at a casino which is going to turn their financial picture around. For others, it may be a lawsuit that they have going for a personal injury that they expect to win big or they may expect to inherit money in the next several years. These folks are not as naïve as the first group, however, the odds of the financial situation changing overnight are very slim.

 Group Three

Let’s look at the third group. This is a group that starts to panic and starts to do things that actually cause more of a financial burden and stress then if they did nothing. These people may take out a loan against their 401(k). They will then pay off a percentage of their debt, but not all of their debt. They have now depleted their retirement account, and yet have not significantly handled their financial situation. Others may take out a second mortgage or line of credit on their home. They basically take whatever equity they have in their home, in an effort to try and pay off debt. In some of these cases, the people do pay off their credit card debt and then tap back into that credit card debt at a later date. For these people, they have now lost whatever equity they had in their real estate and are back into serious, credit card debt. Others will borrow money from family and friends or worse, visit a payday or title loan store. Both of these scenarios are terrible. You either owe a family member or friend risking that relationship or you are paying exorbitant interest to a payday loan or title loan store.

 Take Immediate Action To File Bankruptcy

The best solution for most people who are struggling financially is to take immediate action in terms of debt relief. Now I know that people are reluctant to file for bankruptcy. However, the federal law actually provides the best form of relief to eliminate debt and to rebuild credit in the future. The United States is a country that prides itself on giving people second chances. This is very true with regard to finances. If you file for chapter 7 bankruptcy today, you will have offers for credit within the next several weeks. Lenders understand that you cannot file for bankruptcy protection for another eight years. For this reason, they are comfortable in knowing that if you do except the credit, that you will either pay it back or they will be able to collect through other legal means.

My advice today is simple. If you are someone who is struggling financially with any type of debt, there is help available. If you choose to wait and do nothing, you risk having many of the scenarios listed above become your reality. You don’t want to be held in contempt of court. You don’t want to lose all of your retirement nest egg. You don’t want to borrow from family and friends. You don’t want to visit a high interest loan store or title loan store. What you need to do, beyond seeking advice on the bankruptcy option, is to take immediate action to resolve the problem.

To learn more about how you can be helped and to see what action can be taken immediately, contact my office at 847-520-8100. We have offices in Chicago, Aurora, Waukegan, Joliet, Wheeling, Westchester, and consultation can be done via telephone. You need not struggle with debt anymore.

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