When Life Gives You Lemons — Call an Attorney

For some debtors, the decision to file for bankruptcy only comes after much thought and reluctance. While the decision to declare chapter 7 bankruptcy should be made only with much care, some filers wait too long to take action. In this case, waiting too long can mean that creditors have already begun to take legal action against you. To find out more about what might happen as a result of a court case, read on.

Creditors Taking Action

It begins with a late notice and a few phone calls, but things can quickly go from bad to worse when you owe money and cannot pay. Whether it's a credit card bill or your car payment, creditors don't deal with debtors in a personal way. They have procedures to follow to collect on debts and you will become the target of unrelenting mailings, emails, texts, and phone calls when you fail to pay your bills. Unfortunately, this harassment can pale in comparison to what happens when collection efforts don't result in the full payment of what you owe.

Taking Action on Credit Card and Medical Debts

After you have been repeatedly contacted by collection agencies, you could be sued. You probably won't have the funds to hire an attorney to defend you in court, but you are not likely to win even if you do. Once the judgment is ordered, you will be looking at paying not only the original balance on the debt, but late fees, penalties, and court costs. To make debtors pay, the court can impose liens and wage garnishments on the debtor. Fortunately, however, a bankruptcy filing puts a stop to court judgments, liens, and garnishment actions unless you owe the IRS, student loan debt, or back child support.

Taking Action on Your Car

If you fail to pay your car loan, your vehicle can be repossessed. While a bankruptcy filing can put a temporary halt to repossession actions, you will need to bring your payments up to date to keep the vehicle.

Taking Action on Your Home

Most debtors live in fear of losing their homes to foreclosure. Foreclosure is a legal action that is similar to other creditor actions, but has more laws protecting consumers and a longer time line. For example, it could take up to a year for a foreclosure to be final. If you declare bankruptcy and are behind on your mortgage, you should be prepared to get caught up or lose your home. Your home is what is known as a secured debt, meaning that the home itself is collateral against the debt.

Speak to a bankruptcy lawyer about your debts soon and avoid the consequences of unpaid debts.

For more information, check out websites like georgettemillerlaw.com.