Bankruptcy may help stop a number of collection attempts from creditors
depending on your situation. Many people have a habit of ignoring or neglecting
collection notices from creditors and wait too long to begin the filing
process. Meaning in some cases, it may have made sense legally to file
sooner to avoid further action being taken against you.
Wage garnishment, having bank account funds frozen,
repossession,
foreclosure, and eviction are prime examples. Some debtors may not realize they are
able to stop legal action taken against them before it begins. If you
are in a situation in which you are unable to pay what you owe, while
receiving numerous notices and collection attempts from creditors, it
may be time to consider filing for protection.
Some may receive a summons or a notice of being sued and decide to ignore
it. This could lead to a default judgment in favor of your creditor who
filed legal action against you in an effort to collect. Leaving the debtor
puzzled and curious as to why they are unable to access funds in their
bank account or notice their paycheck has been reduced due to a garnishment
that went into effect.
When collection attempts seem to be getting out of hand, you may want to consider
bankruptcy. When you file, the automatic stay goes into effect preventing creditors
from pursuing collections. Their actions should stop once they learn of
your filing. But some debtors may not realize they are eligible to receive
such protection and end up getting into a deeper financial hole. Discuss
questions and concerns with an experienced bankruptcy lawyer in Dallas
/ Fort Worth.
Reference:
http://www.latimes.com/business/la-fi-montalk-20130707,0,5558853.column