Avoiding Bankruptcy Can Cost You Money

Avoiding Bankruptcy Can Cost You Money

Avoiding Bankruptcy Can Cost You MoneyAvoiding bankruptcy when you know that it’s the smartest choice can cost you money.

In almost every case my clients really did everything they possibly could to avoid bankruptcy. But mistakes are easy to make.

Do not do any of the following before consulting an attorney:

  • Borrow money to pay for borrowed money
  • Draw down savings to pay in full for negotiable debts
  • Withdraw funds from life insurance, 401(k) or other retirement account
  • Sell real estate or other assets
  • Borrow from friends or family

Any of these can easily turn into a costly mistake, and I advise that you seek counsel to determine whether bankruptcy might be a smarter choice. It may be comforting to believe that better times will follow your financial difficulties, or that your heavy debt is just within your reach. But just because it’s comforting doesn’t mean it’s wise. Talk to a lawyer before you make a decision you may regret.

If you have the ability to repay your debts, then pay them. But if you can’t repay your debts, avoiding bankruptcy just delays the inevitable.

Avoiding Bankruptcy Can Cost You Money

Don’t avoid bankruptcy just for the sake of avoiding bankruptcy. In many cases, bankruptcy can actually improve your credit score.

I’m not a psychiatrist or psychologist. I am a lawyer. To effectively represent you, I do not really need to know why avoiding bankruptcy may be really important to you. This is especially true in those cases where you could potentially lose a lot of money.

But if I can put your mind at ease, I consider that part of my job. In many cases, taking no action at all before filing bankruptcy is absolutely the smartest choice that you can make. However, avoiding bankruptcy when it can save you money makes very little sense.

About Brian V. Lee 394 Articles
Brian V. Lee provides bankruptcy, foreclosure defense, business turnaround, and litigation services to clients in the District of Columbia, Virginia, and Maryland. Brian was the Washington, D.C. state chair of the National Association of Consumer Bankruptcy Attorneys from 2016 to 2018.