The Internet is a great tool for learning but when it comes to legal matters, there are many inaccurate statements and pronouncements. For example, I recently posted a video explaining why credit card companies cannot put people in jail for not paying overdue credit card debt and I got several comments from people convinced I was wrong (I am 100% correct about this – however if a credit card company gets a judgment and you don’t respond to post judgment interrogatories or request for production of documents, a judge could, in theory, put you in jail temporarily for contempt of court).
I have also seen inaccurate information related to the timing of a bankruptcy filing. Some folks apparently believe that you are not allowed to file for bankruptcy if you are current with all your creditor payments.
This is absolutely not accurate. You do not need to be in default or behind on payments to qualify for bankruptcy. I have filed many bankruptcy cases for clients who were current with every account but had gone through every penny of their savings, or had borrowed from friends and family, or who had (unwisely) cashed out a 401(k) or IRA in an effort to stay afloat. In many cases, these folks sent money to creditors that they could have protected in bankruptcy and kept for their own needs. Don’t make this mistake.
There is no perfect time to file for bankruptcy but you should not hesitate to seek bankruptcy advice the minute you realize that you are not going to be able to sustain your current lifestyle and debt burden. In fact, you are more likely to make a bad decision that can keep you from filing or delay your filing if you act without the guidance of a lawyer.
Chapter 7 or Chapter 13 bankruptcies are financial tools available to you when you are facing unmanageable debt. Educate yourself early about these options – we are standing by to answer your questions.
