Filing a bankruptcy does not come without any consequences and there are risks involved with its filing. Because of this, it is recommended that you file a bankruptcy only when it is truly necessary.
The biggest risk is the fact that you are barred from filing another bankruptcy for a specified period of time. The time period between the filing of two Chapter 7s, for example, is 8 years from filing date to filing date. So you lose your safety net against any new collection actions for that time. For a period of 8 years, you will lose the ability to stop any garnishments of your check, prevent the shut off of your utilities, and prevent and/or end the suspension of your license caused by a non DUI accident. Therefore, the longer you wait to file, the bigger impact your eventual bankruptcy (if needed) will have.
The other factor to consider is the effect of bankruptcy on your credit history. It makes logical sense to file a bankruptcy if you have impossible debt, because your credit score is already taking a beating. Not so much if you can handle the debt and keep your score up, because the filing of a bankruptcy can put you in a position that makes it difficult to get future credit for a period of time, or, if you can get credit, with unforgiving interest rates.
If you are considering a bankruptcy, it is important that you talk to an attorney about whether it is the right choice for you and what effect it would have on your property and future. The Legal Aid Society of Cleveland is proud to offer bankruptcy counseling and services and potentially provide immediate relief from your overwhelming and burdensome debt. If you are considering a bankruptcy, please contact us today.