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Top Reasons You Should Not Wait Too Long To File Bankruptcy


Usually, people associate bankruptcy filing with personal and financial failure. Because of this, many debtors try to avoid filing for bankruptcy as much as possible. Debtors often try other options and choose to ignore the possibility that bankruptcy could be their best option. For instance, some debtors cash out their retirement accounts or withdraw their life savings to pay off debts while others borrow money to keep afloat. Such options can prove costly in the end.

Even though bankruptcy is not the only way for you to deal with your debt-related problems, the truth is that bankruptcy filing is often the best solution for individuals struggling with overwhelming debt. Filing for bankruptcy provides a way for people to get control of unmanageable debt load without having to sacrifice everything they own.

You might be asking, “Why shouldn’t I cash out my retirement account to repay my debt? The bankruptcy court is still going to take the money in my retirement account once I file for bankruptcy.” Well, that is not true. Under Iowa law, almost all pension plans are protected. Generally, all pension plans, established under ERISA, are qualified plans, hence are exempt under Iowa law. Also, in Iowa, IRAs are exempt. However, since some investments, which you might think are retirement accounts may actually not be retirement accounts, it would be best for you to consult a skilled bankruptcy attorney to determine if any such investments are exempt.

If you are currently struggling to pay off your debts, do not ignore the possibility that bankruptcy could be your best option or wait too long to file bankruptcy. Many people wait too long to seek bankruptcy protection, only for them to regret liquidating all of their assets before filing. If you are struggling with overwhelming debt, here are other reasons you should act now and not wait too long to file bankruptcy.

You Can Avoid Lawsuits

If a debtor who can benefit from filing for bankruptcy waits too long to file, they may end up giving creditors time to file lawsuits against them. Litigation can be time-consuming and costly. Once you file for bankruptcy, regardless of the chapter you file, the automatic stay prohibits creditors from pursuing you for what you owe them, including through collection lawsuits.

You Can Reduce Your Stress

When in debt, there is nothing more stressful than constant creditor harassment. Filing for bankruptcy will prevent creditors from harassing you. For example, you can immediately stop the never-ending phone calls from creditors or debt collectors by filing for bankruptcy. Additionally, if your debts are discharged through bankruptcy, you’ll not have to deal with creditor harassment anymore, thus preserving both your emotional and financial well-being.

You Can Protect Your Home

If, for instance, your house is in foreclosure because you stopped making mortgage payments, filing for bankruptcy can help you protect it. When you file for bankruptcy on time, you can delay or halt foreclosure as long as your home hasn’t been sold. If you wait too long to file for bankruptcy, you might lose your home.

Contact a Southeast Iowa Bankruptcy Attorney Today

If you think bankruptcy filing may be the solution to your debt-related problems or want to find out if it is, contact a skilled Southeast Iowa bankruptcy attorney at the Noyes Law Office today.

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