Bankruptcy is one of the solutions for those who are drowning in debt and cannot afford to pay that debt off. Many people make the mistake of putting off a bankruptcy filing until it cannot be avoided. They may try different debt relief methods or attempt to solve the problem on their own. Unfortunately, there are many downsides to waiting when it comes to filing for bankruptcy. Here are a few of the reasons you should not delay filing if you are in a large amount of debt.
Bankruptcy May Not Be an Option in Your Future
One of the top reasons why you should consider filing for bankruptcy now instead of waiting is that bankruptcy may not be a viable option for you in the future. Bankruptcy laws are always changing, and many of these laws work to make it harder to file. In addition to this, your income-to-debt ratio affects how much you may have to repay when you file for bankruptcy. If your income rises before you can file, you may have to pay more, or even be unable to discharge any of your debt.
You May Be Able to Prevent Undue Stress
Another reason why you should consider filing for bankruptcy as soon as possible is because a bankruptcy filing immediately puts an end to debt collection efforts, including phone calls and attempting to garnish your wages. In some cases, filing for bankruptcy may also prevent a car from being repossessed or a home being foreclosed upon, at least until the terms of the bankruptcy filing are finalized. This can help reduce your stress and prevent undue stress in the future.
The Faster You File, the Faster Your Credit Score Will Improve
The final reason why you should not delay in filing for bankruptcy is because the faster you file, the faster your credit score will improve. When you initially file for bankruptcy, your credit score will take a hit. However, as debt is discharged, your credit score may slowly begin to rise. When you put off filing, your score may take a hit as your debt to income ratio is high and you may have late payments. You delay improving your score, which can negatively affect your future. Filing helps to prevent this, by helping you get your financial life back on track as quickly as possible.
If you are in a large amount of debt that you feel you will not be able to reasonably repay, bankruptcy may be the solution that is right for you. Consult with a bankruptcy law firm to learn whether you qualify for bankruptcy and whether it is the right solution to help you get out of debt.