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TJ, Esq.
TJ, Esq., Attorney
Category: Bankruptcy Law
Satisfied Customers: 11641
Experience:  JD, MBA
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At what point should I consider filing ?

Customer Question

At what point should I consider filing for bankruptcy?
Submitted: 6 months ago.
Category: Bankruptcy Law
Expert:  TJ, Esq. replied 6 months ago.
Hello and thank you for the opportunity to assist you. My name is ***** ***** I will do my very best to answer your legal questions. Here is what I tell my clients regarding BK: Imagine that you're on a sinking ship and that you have a bucket. The sinking ship in this metaphor is your debt situation, and the bucket is your ability to file BK. How do you deal with the sinking ship first? Do you use the bucket to quickly start pouring water out of your boat, or do you fix the leak first, and then use the bucket to remove the water? You do the latter, correct? If you don't fix the leak first, then the bucket isn't much help. The same is true of BK. What got you in this mess in the first place? Lack of income? Too many debts accumulating? The bot***** *****ne is that you need to stop the leak first, and then file the BK. Otherwise, you'll end up in financial distress again after the BK is over. So, if the "leak" is that you lost your job, then get a job first before you file. If your leak is medical bills piling up, then wait until they stop accruing. If it's just too many credit cards, then you can fix that leak easily by stop using them, stop applying for more cards, and then filing the BK. The point of the BK is to give you a fresh start. If it will, then it's time to file. If it won't because the leak isn't fixed, then it's too early. Does that answer your question? Please let me know if you need clarification, as I am happy to continue helping you until you are satisfied.
Customer: replied 6 months ago.
I appreciate the analogy. My credit card bills monthly payment is currently 3x more then my monthly income. My income is improving, getting more clients, but I do not know where to start relative to my credit card bills. I have not used my credit card in months, conversely, I have not paid the bill in months. Therefore, I am trying to figure out what to do here, please advice.
Expert:  TJ, Esq. replied 6 months ago.
Hi again. Let's say your current credit card bills disappeared. Are you able to survive on your current income? Or will you need to turn to credit cards again very soon?
Customer: replied 6 months ago.
I could barely survive on my current income without credit cards.
Expert:  TJ, Esq. replied 6 months ago.
Hi again. If you can't survive without credit cards, then I would probably not file for BK yet since you'll simply be using credit cards against after the BK. And then you wouldn't be able to use BK again for several years. Accordingly, it doesn't yet sound like it is the best time to file for BK. I would either (1) try to improve income, or (2) decrease spending. In other words, stop the leak before using the bucket.
Expert:  TJ, Esq. replied 6 months ago.
I hope that helps. Please let me know if you need further clarification, and please remember to provide positive feedback. Thank you.
Customer: replied 6 months ago.
Thanks for the laymen definitions. Where should I read about BK? When do credit card companies start to take legal action? I have not paid credit card bills in about 3-4 months.
Expert:  TJ, Esq. replied 6 months ago.
Hi again.You can read plenty about bankruptcy by checking out your local library.Credit card companies can take legal action anytime after you default. However, in general I would say that most don't actually sue until many many months, and often more than a year after default.
Expert:  TJ, Esq. replied 5 months ago.
Hello again. I didn't hear back from you, so I'm just checking in to make sure that you don't need more help on this issue. If not, then please remember to provide a positive rating to close out this question (and please remember that your positive rating is the only way that I'll get credit for helping you, so I greatly appreciate it). Thank you!

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