When you find yourself in deep financial trouble, you may realize that bankruptcy may just be the best available option in order to settle your debts. Take caution, though, because filing bankruptcy may have undesirable lifelong consequences. On the flip side, a bankruptcy filing enables you to acquire a discharge of your debts and this can offer some sort of relief from issues you may come across when in debt.
What are the positive effects of filing bankruptcy?
When your bankruptcy proceedings go without a hitch, you may be able to have your debts discharged. The discharge is an irreversible order from the bankruptcy court that relieves you of your debt. Another favorable effect of declaring bankruptcy is that it stops your creditors from harassing you to pay off your debts. On the other hand, you must remember that you may also experience some setbacks like loss of property and a possible decline in your credit score.
While the suggestion of declaring bankruptcy may be undesirable for some, albeit more sensible for lack of better alternatives, you just need to bear in mind that, in particular, scenarios, delaying your bankruptcy may cost you more in the long run.
What are the consequences of delaying a bankruptcy filing?
- You have to put up with unpleasant meetings with creditors in an effort to avoid a potential lawsuit. You are burdened with explaining why it took so long for you to pay up and trying to convince them that you will do your best to keep up with your payments.
- You end up paying more interests that prove to be difficult to manage because you thought consolidating your credit card debts to a single loan is the best option. Unknowingly, this results to further struggle to pay off the debts, and with costlier interests added on.
- You are selling off or cashing in properties to stay afloat and pay off your credit card debts when your properties could have been exempted in a bankruptcy case.
- You lose more money because you are not paying the principal amount of your loans. Remember, interests accrue when you are paying less than the total amount of your loans or worse if you settle only the minimum amount due. This action will only chain you to your debt and in turn, will make you sink deeper and deeper in the red.
- You waste precious time wallowing in self-pity when you should be taking a proactive stance, looking for ways that could get you out of the financial mess you are in.
Aside from those already mentioned, waiting for the silver lining or hoping for a miracle that will change your circumstances will only work against you. Further delays in bankruptcy filing can keep you from being eligible to file a Chapter 7 bankruptcy, leaving you no other choice but to file for Chapter 13 bankruptcy instead. This is not a good move because in Chapter 13, you will have to settle as much as you can with your creditors during your repayment plan (which should be completed in about three to five years) instead of having your debts written off, as in the case of Chapter 7. Your repayment plan will most likely cost you more money because it is dependent on your income. If you only consulted an Arizona bankruptcy attorney early on, you will probably have become better aware of the steps you can take to get yourself a fresh start.
Time is of the essence when making urgent financial decisions such as a bankruptcy filing. The more you procrastinate, the further you delay the discharge of your debts, and consequently, that of your new beginning. Time is precious, moments are fleeting. Once gone, you can never take them back. Once it is clear that bankruptcy is the best solution to your financial problem, it is better to get it over and done with so that you can immediately prepare and restore order to your finances. Regardless of an improving or worsening situation, it is best to get in touch with a bankruptcy attorney in Arizona who will provide the best legal advice that may help alleviate your economic situation.
One of the best bankruptcy attorneys in Arizona can be found at Pew Law Center. Our understanding and experienced bankruptcy attorneys may be able to assist you and guide you on the most appropriate options available to you. Call us for a free initial assessment of your case.