Few situations trouble me more than when folks enter my office only to learn that they are, in fact, too broke to file bankruptcy. Unfortunately, too many people abide by the popular misconception that people are required to completely exhaust their funds before they can file. While there can certainly be some negative consequences to filing Chapter 7 or Chapter 13 bankruptcy prematurely, it is important to remember that a Maryland or Washington DC bankruptcy lawyer can help you plan better if you take action sooner rather than later. If you wait too long, you can substantially limit what a bankruptcy attorney might be able to do for you.
Another huge drawback to waiting too long to speak to a bankruptcy lawyer involves how control of your property and assets could be affected. Waiting too long can negatively impact you if your case involves:
- Foreclosure — If you do not file before your home is sold at a foreclosure sale, it will be too late to cure the arrearage and reinstate your mortgage. If you are hoping to save your home, you need to file before the sale, preferably as soon as you have fallen behind on payments and need foreclosure help.
- Repossession — If your car has been repossessed, you may be able to get it back through a Chapter 13 bankruptcy. However, you have a very limited window of time to do so, and you may incur even more additional fees, so it is best to file before repossession.
- Tax Liens — If the Internal Revenue Service (IRS) files a lien before you file bankruptcy, you will have to pay additional taxes, penalties and interest on the tax claim. Again, this represents another advantage of filing bankruptcy sooner rather than later, as a bankruptcy prevents the IRS from filing the lien at all.
As I have said before, it is understandable that many people try to solve their problems on their own, but I cannot emphasize enough the damage that can be done by delaying a bankruptcy filing. Taking action as soon as possible not only increases the options available to you, but often will save you more money as well.
Law Firm of Kevin D. Judd – Washington DC bankruptcy attorney