Whether it is basic misconceptions about the process or just personal shame, the idea of declaring bankruptcy leaves far too many of my clients wondering why they waited so long to set up an initial consultation with my office. It is important to remember that delaying or failing to file bankruptcy often makes bad situations even worse.
If you have been considering Chapter 7 or Chapter 13 bankruptcy, you should know that there can be a tremendous risk in trying to keep up with mortgage or credit card payments while hoping to find a new job or second job. First of all, too many people end up depleting their savings in the effort to keep up, thus risking not having enough money to even file for bankruptcy.
Worse yet, I have had clients who, after exhausting their savings, decided to tap into their 401ks or IRAs to continue paying bills. This not only incurs taxes and penalties, but these withdrawals are also viewed as income by the bankruptcy court. As a result, you might not qualify for Chapter 7 relief because of that additional “income.”
Whether it was a job loss, an illness or a divorce that caused your financial situation to spin out of control, you owe it to yourself to speak to a Washington DC or Maryland bankruptcy lawyer before your bad situation becomes worse. I understand why many of my clients believed that they were doing the right thing by trying to continue to pay their bills, but the truth remains that the longer you wait to file bankruptcy increases the likelihood of losing assets that could have been saved. You could also end up paying more money than you might have had to with quicker action.
On Wednesday, I will continue going over more reasons why inaction is more detrimental than taking action in bankruptcy cases.
Law Firm of Kevin D. Judd – Maryland bankruptcy attorney