How Long Should I Try To Avoid Filing Bankruptcy?

20 Feb How Long Should I Try To Avoid Filing Bankruptcy?

No one wants to file for bankruptcy. Most people who come in for legal consultations with me will have actively tried to avoid filing bankruptcy for about 3 years; some more/some less.

It is fine to consider non bankruptcy alternatives for debts, but it is a good idea to get legal advice early on; when you find yourself facing trouble.

  • A good lawyer won’t recommend that you file for bankruptcy if there are better options.

I wish people would seek legal advice earlier.

On one hand, it shows how hard people try to stay out of bankruptcy.

On the other hand, they often much worse off due to the delaythan they were when they first started thinking they were in trouble.

Many people increase their total debt significantly as they “rob Peter to pay Paul“, just trying to keep up their minimum debt payments. During those years, they pay thousands of dollars of interest to their creditors and may have made little or no progress in payment of the overall debt.

People will do anything in the quest to avoid bankruptcy. They:

  • ignore health problems
  • fail to get proper dental care
  • let their homes and cars go into disrepair
  • use up their life savings, their home equity and/or their retirement funds

For many people, these efforts just allow them to tread water, but for many others they just move to the deeper end of the pool. Many people are diverted into debt management programs for several years without ever paying off their debt, or they might address some of their debts but not others.

  • A good program will take into account a payment plan AND your ongoing budget.

Unfortunately, many debt management and credit counseling programs don’t consider whether or not you are able to actually make all the payments that will be required to complete the program in addition to paying your ongoing living expenses.

  • It doesn’t do you any good to spend a year paying a portion of your debts, only to find yourself without money to pay your mortgage, utilities, medical costs or make necessary repairs to your car.

The counselors might not be able to work with all your creditors. Some set up payments on only a portion of the debts. In other words, you may end up paying a lot of money and still not solve the whole problem. Many people end up in bankruptcy anyway.

  • Early intervention may be the key to getting control over your life.

A consultation with a consumer bankruptcy attorney early on should be one of the first steps you take when you see yourself in financial distress, not the last. Lawyers look for the best solution for you overall. Avoiding seeing a bankruptcy lawyer does not me you are going to successfully avoid bankruptcy, and the earlier you see a bankruptcy lawyer, them more help they might be able to provide.

The sooner you speak to an attorney, the more options you might have.

Early intervention options may include a bankruptcy such as a Chapter 13 bankruptcy repayment plan, or they might recommend a non-bankruptcy alternative, such as working with a really good credit counseling agency.

At some point, these alternate options may disappear, and Chapter 7 may be your only option.


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Concentrating in Consumer Bankruptcy Law since 1988; Wake Forest Law School JD 1987 Law Office of Susanne M. Robicsek since 1993, Law Clerk to Judge Rufus Reynolds, US Bankruptcy Judge for Middle District of NC; Burns Price & Arneke, PA, David Badger and Associates, PA.

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