What happens if I don’t file bankruptcy?

Edrie Pfeiffer
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Edrie Pfeiffer, Bankruptcy & Divorce Attorney

Bills are mounting and you’ve stopped opening the mail.  You can no longer afford your monthly expenses and are living off credit cards.  You know garnishments, car repossession and/or foreclosure are just around the corner.  Despite all of that, you are scared to file bankruptcy.  You’re afraid of the impact if will have on your credit and your future; you’re afraid of the stigma placed on bankruptcy and that bankruptcy won’t relieve all of your financial burdens, and you’re concerned that ultimately you can’t afford file.  Sound like you?  Read more! 

Here’s what will likely happen if you don’t file:

  • Your credit card debt will continue to increase and you will find yourself only able to make the minimum payments (if even that), with high interest rates and balances that never seem to reduce, which will take years to pay off.
  • The creditor(s) will garnish your paycheck, taking 1/4th of your after-tax pay until the debt is repaid.Even worse, the creditor could freeze your bank account, leaving you unable to access any of your money for months.
  • Your car could be repossessed & your home foreclosed and you could still be held liable for the balance owed on your car and mortgage.
  • Your employer will become aware of your financial difficulties as they must process your garnishments.Additionally, if you no longer have a car, getting to work will become more of a strain.
  • Your credit score will dwindle with high mounting debt and minimal means to pay it.

Here’s what will likely happen if you do file:

  • Credit card debt could be wiped out or significantly reduced.
  • Bankruptcy can stop a garnishment and/or judgment, repossession or foreclosure.
  • The likelihood of your employer, family and friends discovering is minimal. Bankruptcies are published in a business newspaper that very few people receive.  It’s also possible to review court records to see if someone has filed but you must search by name or social security number, as there is no magic list for someone to view.  With over 20,000 bankruptcies filed annually in Virginia, it would be very hard for your case to be discovered.  If you’re concerned about the stigma and saving yourself embarrassment from family, friends and employers, bankruptcy is much more inconspicuous than a garnishment, repossession or foreclosure.
  • Your credit score could actually increase. This is because your payments will no longer show up as delinquent, which has a positive impact on your score.  Additionally, your debt to income ratio should drastically improve which also has a positive impact on your score. You would likely be able to get a new a credit card right after filing for bankruptcy, and if used appropriately, can be extremely beneficial in rebuilding your score.

Feel like you can't afford to file?  A knowledgeable and experienced bankruptcy attorney will look at the circumstances in your case and provide recommendations that you are probably unaware of regarding how you can pay for your bankruptcy.

Why continue to live life under excruciating financial burden?  Why not file bankruptcy and get an opportunity to start over?  At Hampton Roads Legal Services, not only do we help you realize a Fresh Start through bankruptcy, but we help you Start Fresh after you file. 

If nothing else, please order your complimentary copy of our book "10 Myths About Debt Collection Actions & Bankruptcy That Every Consumer Should Know."  If you don't feel ready to file for bankruptcy now, you will after reading this book. 

Give us a call at (757) 320-2010 today! 

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