People often assume bankruptcy should only be considered when no other options exist. However, did you know that there can be pitfalls to waiting too long to file for bankruptcy? While many may not want to file too soon, it’s also critical to consider the damage of waiting too long.
To further help you decide whether bankruptcy is the right choice for you at this time, here are the common pitfalls of waiting too long to file for bankruptcy.
Letting Debt and Interest Soar
While your debt may seem just barely manageable now, if you are struggling to keep up with the minimum monthly payments, the problem can grow. With debt often comes interest, and that interest can steadily creep into a territory that is hard to turn back from. By considering bankruptcy sooner rather than later, you can gain control over your finances more effectively. This sentiment is especially true for those who will only qualify for Chapter 13 bankruptcy. This form of bankruptcy does not completely wipe away debt like Chapter 7; it allows the debtor to pay back the debt through a manageable repayment plan.
Loss of Property and Assets
One of the biggest fears people face when dealing with unmanageable debt is the threat of losing property and assets. Creditors may take legal action against you in the form of wage garnishments, bank levies, or property liens. In some cases, you might even face foreclosure on your home or repossession of your vehicle. Filing for bankruptcy puts into place an automatic stay, which stops most collection actions and gives you a chance to protect what you have.
Worse Damage to Your Credit
It is no secret that bankruptcy can impact your credit score for a few years post-filing. This truth can often lead one to feel like filing for bankruptcy isn’t an option. However, the same is true and can often be worse if you are struggling with debts that you can’t pay. The longer you let your accounts go delinquent, the worse the damage becomes. Filing sooner rather than later allows you to begin the rewarding process of rebuilding your credit sooner. Bankruptcy can stay on your credit report for up to 10 years, but many lenders often care more about what you’ve done since filing than the fact that you filed.
The Emotional and Physical Toll
Financial struggles are believed to be one of the leading causes of relationship dissatisfaction. Research indicates that financial struggles are a primary cause of conflict in 40% of disputes reported by individuals in long-term relationships. This phenomenon is often attributed to the emotional and physical toll that dealing with debt and other financial struggles can take on an individual, let alone a couple. By postponing bankruptcy, you may be prolonging this stress unnecessarily. Many people report feeling immediate relief once they take action and start the bankruptcy process.
Delaying Your Fresh Start
By postponing bankruptcy and waiting for the worst to come, you are depriving yourself of a better financial future arriving sooner. The longer you wait, the longer it takes to reset your financial life. By delaying, you may miss the opportunity to get back on your feet, rebuild your credit, and move forward with your life. Whether it’s applying for a loan, buying a home, or simply living without financial fear, a timely bankruptcy can open doors that otherwise remain closed.
Get Started on Your Fresh Start Sooner with Adam M. Freiman
Navigating bankruptcy can feel daunting, but there is no reason to do it alone. Having a qualified bankruptcy lawyer by your side can make the process seamless. But you shouldn’t just choose any bankruptcy lawyer; you need a lawyer with experience that you can trust. That is where Adam M. Freiman is there to help.
Adam has over 25 years of law experience and was the founder of one of the most notable bankruptcy law firms in Baltimore. However, Adam doesn’t believe that bigger is better; that is why he now operates his own firm where he personally represents every one of his clients.
To learn more about how we can assist you, contact our office today!
