When Your Back Is Against The Wall Because Of Debt, What Can Filing Bankruptcy Do For You?

Have you ever gotten behind on paying a monthly debt and then stopped paying altogether? Did you begin to avoid phone calls from your creditors or the monthly billing statement you get in the mail? Did you ever begin to ignore the debt and pretend it didn’t exist? Have you ever cashed out all or part of a retirement account to catch up on your bills?

Many people who owe money to their creditors can answer “yes” to one or more of these questions. Owing debts that you can’t pay can become overwhelming, stressful, and add unnecessary pressure to your life.  But ignoring the debt can cost you more in the long run.  Pretending that it doesn’t exist or ignoring it doesn’t make it go away. Filing bankruptcy can stop creditors from collecting debts that they are owed.  Below are a few instances of how filing bankruptcy can help.

IRS Tax Levy/Garnishment of wages or bank accounts – Filing bankruptcy can stop money from being involuntarily taken from your paycheck or bank account.  If a creditor sues you for a debt and gets a judgment against you, then they can execute on that judgment and garnishment may occur.  It is better to file bankruptcy once you are sued rather than waiting until you are being garnished simply because you have full access to your money without restrictions.  

Suspended driver’s license – If you are involved in a motor vehicle accident and are determined to be the responsible party who must pay for damages, then you could be sued by a plaintiff insurance company to pay the debt arising from the accident.  You risk your license being suspended if you don’t pay.  If you bankrupt such debt, you can prevent or have the suspension of your license lifted.

Past due utility accounts – If you are on the verge of having your utilities shut off due to non-payment, chances are you may have other debts that you haven’t paid as well.  Filing bankruptcy can prevent a shut off of your utilities.  You may then have continued utility service and start fresh with a zero balance account. 

Does any of this apply to you? It is always best to seek counsel before things get too far out of control.

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