Bankruptcy is more art than science and there is not necessarily a right time to file, but there can be a better time to file. For a variety of reasons (uncertainty, denial, etc.) many people typically wait too long to file a bankruptcy. Delaying the filing can lead to additional financial problems like wage garnishment, vehicle repossession, or home foreclosure. In addition, waiting too long to file can also have a negative effect on your health as a result of long-term stress.
If you wait too long to file, you will give creditors the opportunity to sue you for breach of contract and obtain a judgment against you. The creditors can then use that judgment to levy on your non-exempt assets, such as your wages or bank account. Filing sooner (rather than later) will prevent creditors from suing you and obtaining a judgment.
Waiting too long to file can also put your home or vehicle at risk. When there is not enough money to go around and you continue to pay your credit card bills, it is common to fall behind on your mortgage or car payments. Falling behind on your mortgage or car payments can lead to foreclosure or repossession. If you consider bankruptcy once you realize that you cannot pay all of your bills, you may be able to maintain your home or car payments without worrying about the burden of mounting credit card bills.
If you realize that you are struggling to make your monthly payments, now is the time to speak with a bankruptcy attorney and begin considering your options. Sometimes there are reasons to wait to file, and if there are, we can discuss those issues. But, if you’ve waited too long already, waiting even longer can make your financial problems more stressful than necessary.