It Is NOT Advisable to Delay Filing for Bankruptcy

Interviewer: Do people tend to wait too long to file?

A Delay May Result in Judgments or Wage Garnishments

John Reade: I see this happen frequently. It usually is not a good idea to wait too long to file bankruptcy, for the following reasons: Number one is if a person owns any real property, or is presently employed, when a creditor files a lawsuit against them and gets a judgment, the person’s wages can be garnished. In addition, if they own any real property a lien will attach to their real property after a creditor gets a judgment.

If a person had filed for bankruptcy before they got sued, their wages could not be garnished. In addition, there would not be a lien against their real property, like their home. As another example, let’s say an original creditor, because of non-payment, sells the debt to a company that buys bad debts, or submits the debt to a collection agency. Then one has more creditors that he or she has to list in their bankruptcy. It is stressful when creditors call the person and hassle them over the phone and in writing, and sometimes call their work.

I have even had people come in and tell me, “Well, they called my next door neighbor.” or, “They called my family member or relative.” All of this can effectively be averted by filing for bankruptcy sooner rather than later.

The Self-Employed Can File for Bankruptcy

Interviewer: You have handled many bankruptcy cases for many kinds of clients. Just as an illustration, have you handled bankruptcies for self-employed individuals?

John Reade: I have.

Interviewer: Are there any other situations a person could be in where they might think, “I wonder if I could file.” Or, “I wonder if he’s handled that.”

If You Live on a Source of Income Such as a Pension, You Will Not Lose That Income after Filing for Bankruptcy

John Reade: Sometimes people think that if they file, and they have an income from a certain source, that they will lose that income or it will be taken away from them after they file for bankruptcy. For example, people living on retirement accounts and/or pensions.

It is Advisable to Consult an Attorney before Filing for Bankruptcy If You Have a Pending Divorce

Interviewer: What about divorce?

John Reade: If someone is in the process of getting a divorce or even considering one, there may be bankruptcy issues. It is extremely important to talk to an attorney that handles bankruptcy before the divorce is settled and finalized. If anyone going through a divorce even thinks they might have to file for bankruptcy protection in the future, they need to get legal advice so they do not do anything that might adversely affect their ability to file a bankruptcy in the future, or get rid of a debt as a result of a divorce.

In those situations, I would say, it is extremely important to talk to someone who is knowledgeable about bankruptcy prior to settling and finalizing a divorce, if there is even the possibility that he or she, or the other spouse, may be filing for bankruptcy in the future.

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