When you decide to declare bankruptcy, you must make a comprehensive list of all creditors to which you owe money. Every one of them must be listed in the paperwork as bankruptcy is designed to treat all creditors fairly in regards to payment and nonpayment. Depending on the petitioner’s specific situation, creditors will be current with increasing balances, or consistently delinquent, or in collections.
Delinquent bankruptcy filers typically have to deal with harassing phone calls, lawsuits, wage garnishments and/or bank levies. Petitioners who have been dealing with these situations are often stressed because they don’t have the funds to make the problem stop or the money to file for bankruptcy and they’re concerned that the problem’s escalation is only going to decrease the amount of money they have to work with due to probable wage garnishments and bank levies or seized assets. In extreme cases, these individuals may even be threatened with arrest for nonpayment of bills. This is actually illegal for a collector to say, but it is still a common enough scare tactic and one that can induce a great amount of stress.
Then there are the petitioners who are current on their bills, but overwhelmed by the inability to pay down balances, etc. They have decided to file for bankruptcy, but often wonder when the appropriate time is to stop making their payments. If you don’t know the protocol you may fear doing the wrong thing can get you in trouble.
Once you have decided to file for bankruptcy, stop using your cards. Creditors will review your account after they receive your bankruptcy notification. You don’t want them to see an excessive amount of charges on the account in the 3-6 months leading up to your bankruptcy filing. You don’t want them to see large charges outside of the 6-month window that could lead them to scrutinize your activity. Even if the large purchase was made before you decided to file for bankruptcy, the appearance of inappropriate behavior makes a big difference in your case.
After you’ve stopped using your cards, you can stop paying on them. There’s no reason to send payments to accounts that are going to be listed in your bankruptcy schedules. Expect to receive some collection calls after you miss your first payments. They generally won’t be negative as your accounts are very past due. The aggressive tactics are typically saved for more aged accounts. These first phone calls will generally be requesting an update and advising you that you may have overlooked a payment. Let the caller know that you are filing for bankruptcy. The next few calls may become more aggressive. Respond calmly and continue to advise them of your bankruptcy filing each time they call. When the creditor receives the bankruptcy notification, you no longer need to worry about the collections calls.
If you have more questions about the bankruptcy process or how to file for bankruptcy please contact one of the experienced southern California bankruptcy attorneys at Westgate Law. We can answer your questions about bankruptcy, its benefits and how it can assist you in obtaining a fresh start for your financial future.