Nobody wants to file bankruptcy, but sometimes it's a necessity and a good option to get a fresh start.
Here are the top three reasons given by most people as to why they don't want to file bankruptcy right now:
1. I will try to resolve the debt on my own or through debt consolidation or debt settlement.
Sure - creditors are willing to accept less than what's owed, but the only way it works is if you have cash to pay them quickly! (Creditors are typically willing to accept 35% to 60% of what's owed to them, but you must pay them off now.) It does not work otherwise. Beware of debt consolidation or debt settlement companies as they charge a large fee for setting up a savings account for you to then try to use to settle. They will not stop the ongoing harassment or lawsuits.
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2. I don't have the money to pay an attorney to file bankruptcy.
Keep in mind you're paying fees to get rid of substantial amounts of debt that far exceed the amount most attorneys will charge.
Paying an attorney to file bankruptcy gives you a much greater return on your money. Most offer convenient payment plans so you can pay your fees and costs to file the bankruptcy easier than you think. (If you're going to file bankruptcy my recommendation is to stop paying the rest of your unsecured debt as in most cases that debt will be discharged.)
Also beware of using a document preparer/paralegal to file your bankruptcy. While this type of service can ultimately save money, it can sometimes cost you more money in the long run. Because they are not actual attorneys, they cannot offer any legal advice to those filing for bankruptcy; without proper advice, you could potentially lose assets and/or have other major problems with your case. I've had many people come to me after their filing to try to correct problems - by that time, it is oftentimes too late.
3. I'm going to ignore the creditors (and hope they go away).
Unfortunately creditors will not go away. They may sell the debt to collectors, who can be even more aggressive than the original creditor. If you ignore the collection efforts, lawsuits will occur, and if judgments are obtained, garnishment of wages and bank accounts can occur, liens can be placed on real property, etc. Ignoring the creditors is not a good option.
Also if you wait to file, and your circumstances change (i.e. you receive an inheritance, you receive a lump sum disability award, you win the lottery, etc.), you may not be able to file bankruptcy then. Unforeseen circumstances can severely limit your options.
For those people that don't make the decision to file bankruptcy, I guarantee I will see you back in my office, whether it be 4 months from now or a year or two down the road. If you wait, you're that much more delayed when you could already be on the road to recovery.
THE LONGER YOU WAIT, THE MORE LIMITED YOUR OPTIONS BECOME. PLEASE DON'T WAIT TO DECIDE.
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