As a bankruptcy attorney, I am often asked by prospective clients if they should wait to file bankruptcy. Some of them believe that the job market may soon turn around so they can find better employment. Others want to wait and pay what they can by living off their life savings. Still others just don’t want to do it until their backs are up against the wall. If you are currently struggling with mounting debt, you should ask yourself: Why wait?
The longer that you wait to file bankruptcy, the worse things are likely to become. If you wait too long, several of your creditors are likely to start filing lawsuits against you. Once they do that and receive a judgment, they are likely to start garnishing your bank account leaving you nothing left to pay your mortgage, utilities or food. The longer you wait, the more stressed you will become because those collection agencies are going to call you from morning till night, then they will start calling your relatives and friends to try to find you. The longer you wait, the more probable it is that your home will be in jeopardy of foreclosure or your vehicle in jeopardy of repossession.
Often people will take money out of their IRA or 401(k) in order to either pay down their unsecured debts such as credit cards and medical bills or even to live off those retirement funds by paying for food and shelter. Please, don’t waste your retirement money paying for your credit cards. Don’t take out a second mortgage on your home to pay off loans or medical bills. There is a better solution that will secure your retirement savings for the future when you are sure to need them.
If you qualify, Chapter 7 and Chapter 13 bankruptcy can help you with several things. First, it will stop your creditors from calling you, sending you collection letters and harassing your friends. Second, it will keep your creditors from repossessing your vehicle or foreclosing on your home. Third, it will stop any lawsuits or judgments that are pending against you. Fourth, it will allow you to discharge most of your unsecured debts as long as you qualify.
In a Chapter 7, one can discharge or completely wipe out credit cards, medical bills, unsecured loans, etc. without any sort of payment plan. You must qualify by having a certain threshold income and a close examination of your assets are needed before filing to make sure that they are protected. Most people do not have a problem with these issues, but you will want to meet with a professional bankruptcy attorney beforehand to make sure that you are safe.
Chapter 13 will allow you to propose a repayment plan for your creditors where you can repay your unsecured debts a percentage of what is owed to them. That percentage is based upon your income and your assets. If you have higher income or a higher amount of assets, you will pay a higher dividend to your creditors. If you have lower income and a lower amount of assets, you will pay a lower dividend out.
Please give me a call at 281-847-4345. I’ll be happy to sit down with you for a free, no obligation consultation to evaluate your situation and inform you of your different options on taking care of your debt through bankruptcy. You can also send me an email at firstname.lastname@example.org. I look forward to hearing from you soon.
Rod S. Kemsley
KEMSLEY LAW FIRM, P.L.L.C.
Attorneys & Counselors at Law
505 N. Sam Houston Parkway E., Suite 400
Houston, Texas 77060