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Home > Ask The Get Out of Debt Experts > Should I Tell My Creditors I Am in the Process of Filing Bankruptcy? – Sofia

Should I Tell My Creditors I Am in the Process of Filing Bankruptcy? – Sofia

“Dear Steve,

I have $57,000 in credit card debt, famiy of 4, income of $41,000 a year. I also own a home which is worth about $130,000. I am current on the mortage. Last month, I stopped paying my credit cards and brought my utilities and insurance up to date. I qualify for Chapter 7. As you can imagine, the phone is ringing off the hook.

Do I tell my creditors, I am in the process of filing bankruptcy or do I just wait until I actually file? I have an appointment with a bankruptcy lawyer next week, but would like to know what to do in the meantime.

Sofia”

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The Answer

 

Dear Sofia,

Excellent question. I would suggest that you do nothing to tip your hand until you file. As soon as you file you will get a bankruptcy case number and that is your golden ticket to making the collection calls legally stop. If a collector calls after you file, and they might as your case filters through the system, say this:

“Thank you for calling me today but I have filed bankruptcy and this debt was included. My bankruptcy case number is [case number] and my attorney is [attorney name]. My attorney is representing me in this matter and you should only contact my attorney at [telephone number] for any further information on this debt. Do not contact me.

Thank you.”

Until you file bankruptcy anything you say about wanting to or intending to file bankruptcy is a hollow statement collectors hear all the time. Most will ignore it. But once you cough up the case number and attorney, collectors have a process on how to deal with that and will stop calling you.

Please update me on your progress by posting updates here in the comments section of your question. I’m very interested in how this works out for you.

Big Hug!

Should I Tell My Creditors I Am in the Process of Filing Bankruptcy?   Sofia
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About Steve Rhode

Steve Rhode
Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.
  • 4debtors

     Question – My husband and I will hopefully file for Chapter 13 soon.  What worries me (well a LOT worries me!) is that we have a mortgage, a car loan (both current) and we also have two checking accounts there.  (One is my husband’s work travel account, but under his name).  The car loan will be included in the bankruptcy.  Will the bank penalize us in any way for “defaulting” on the car loan?  Can that affect our mortgage with them?

  • Steve Rhode

    Well the good news is that the bankruptcy will terminate all the creditor actions. I’d just focus on going to your appointment with all the most recent card statements in hand. It sounds like the right approach given the situation.

  • Ccarson1954

    Dear Steve,

    I am filing bankruptcy soon, I have a appointment with Legal Aid in Jacksonville, Fl. I am unemployed and have not been able to continue with paying my credit cards. Chase has already sued me and I went to court 1/27/11, the pretrial conf., I denied charges to give time and have a trial date for 3/22/11. I also filed a motion to dismiss as there was no credit card agreement attached to their summons, complaint and statements. Even if this is dismissed (which I fear it will not be) I am filing bk. I also owe other creditors even though I basically have nothing they can get, I don’t want a judgment following me around until I might possibly have assets. I wonder if you know if Discover card has their own attorneys or do they turn the account to a collection agency. All my creditors will be included and I have an appointment Feb 10 with Legal Aid in my area and will know more about the bankruptcy. Never filed before and never been in this type of circumstance. This has really stressed me but I know they cannot attach a lien to my home because of the Florida Homestead law and also the tenants by entirety law protects my home as my husband is not on any of my cards. Filing chapter 7 seems to be the only way I can start over, I see no other option, as I have no means to settle and have not been able to find a job. I am sure there are others in my situation who have made mistakes involving credit cards. I wish I could go back and tear up their slimy credit card offers. Should have thrown them in the trash, if you know what I mean?

  • Ccarson1954

    Dear Steve,

    I am filing bankruptcy soon, I have a appointment with Legal Aid in Jacksonville, Fl. I am unemployed and have not been able to continue with paying my credit cards. Chase has already sued me and I went to court 1/27/11, the pretrial conf., I denied charges to give time and have a trial date for 3/22/11. I also filed a motion to dismiss as there was no credit card agreement attached to their summons, complaint and statements. Even if this is dismissed (which I fear it will not be) I am filing bk. I also owe other creditors even though I basically have nothing they can get, I don’t want a judgment following me around until I might possibly have assets. I wonder if you know if Discover card has their own attorneys or do they turn the account to a collection agency. All my creditors will be included and I have an appointment Feb 10 with Legal Aid in my area and will know more about the bankruptcy. Never filed before and never been in this type of circumstance. This has really stressed me but I know they cannot attach a lien to my home because of the Florida Homestead law and also the tenants by entirety law protects my home as my husband is not on any of my cards. Filing chapter 7 seems to be the only way I can start over, I see no other option, as I have no means to settle and have not been able to find a job. I am sure there are others in my situation who have made mistakes involving credit cards. I wish I could go back and tear up their slimy credit card offers. Should have thrown them in the trash, if you know what I mean?

    • http://GetOutOfDebt.org Steve Rhode

      Well the good news is that the bankruptcy will terminate all the creditor actions. I’d just focus on going to your appointment with all the most recent card statements in hand. It sounds like the right approach given the situation.

  • http://www.chs-law.com/bankruptcy.html Carl H. Starrett II

    I have mixed feelings about this. When a potential client comes to see me, a major goal is typically stress relief. But if the creditors keep calling, where is the stress relief?

    The difficulty is predicting how the creditors will react. Debtors lie to creditors, so it is possible that the creditor may become more aggressive. Some might even take a threat of bankruptcy as the clue to initiate litigation to collect. Other creditors may simply put the file on hold.

    The other difficulty is paying fees. It might be several months before you can pay the attorney in full.

    What I will sometimes due is send out a notice of representation letter once I’ve been retained and receive a deposit. The letter prohibits third party consumer debt collectors from contacting my client. And in California, this also prohibits certain original creditors from contacting the debtor as well. Some savvy bankruptcy attorneys ahve used this strategy to settle FDCPA claims and use the settlement proceeds to pay for the bankruptcy fees. Now that is ironic!

    My suggestion is to find and hire the right bankruptcy…one who doesn’t mind fielding those calls while you save the money for fees.

  • http://ripizzo.blogspot.com/ RIPizzo

    Excellent information.
    Thank you .

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