Why You Should File Bankruptcy Before You Get Sued By A Debt Collector
Many times, when a prospective client comes into the office for a bankruptcy consultation, they are unsure of whether or not they should file bankruptcy. Or, if they do want to file, they aren’t sure when they should file.
One of the best ways to answer that question is with another question, “Has anyone served you with a lawsuit?”
If a creditor or debt collector has served you with a lawsuit, the best response is for the client to take action immediately. While I advise them that they should consider responding to the lawsuit, unless they have a legal defense to the lawsuit or the ability to pay a judgment, my belief is that they should file bankruptcy before the creditor gets a judgment.
Filing for bankruptcy before you get sued by a debt collector can be a good idea in some cases, as it can help you protect your assets and potentially eliminate your debt. Here are a few reasons why you might want to consider filing for bankruptcy before you get sued by a debt collector:
- Bankruptcy can stop creditor lawsuits: When you file for bankruptcy, an automatic stay goes into effect that prohibits creditors from taking any collection action against you. This includes suing you for debt. So, if you are facing a lawsuit from a debt collector, bankruptcy can help you stop the lawsuit in its tracks.
- Bankruptcy can protect your assets: If you are facing a lawsuit from a debt collector, you may be at risk of having your assets seized to pay off your debt. Filing for bankruptcy can help protect your assets by creating a barrier between you and your creditors. Bankruptcy will stop paycheck and bank account garnishments.
- Bankruptcy can eliminate your debt: Depending on the type of bankruptcy you file, you may be able to have some or all of your debt eliminated. This can provide a fresh start and allow you to move forward with your finances.
Of course, there can be reasons why someone should delay filing bankruptcy, such as expecting a large inheritance in the near future. If someone needs to delay bankruptcy but still needs temporary protection from garnishment or other legal action, we can talk about some options to delay any legal issues. These tactics are meant only to give some breathing room to allow for filing bankruptcy later. They aren’t intended to avoid dealing with the debt causing the crisis.
Talk To A Top-Rated Denver, Colorado Bankruptcy Attorney Today!
It’s important to note that bankruptcy is a serious decision that should not be taken lightly. You should speak with an experienced Colorado bankruptcy attorney or a financial advisor to determine if bankruptcy is the right option for you.
We offer free consultations to individuals who are considering Chapter 7 or Chapter 13 bankruptcy. The easiest way to schedule an appointment for a time that is convenient for you is by going to our scheduling page.