Last year a lady from Houston come see us about filing a chapter 7 bankruptcy. We interviewed her, determined that she qualified to file chapter 7 bankruptcy, and then we quoted her a fee and invited her to come back and get the case started. But she waited...a year...before hiring us and providing the information and documents that we needed to file her case.

Well, after reviewing the new information, it turns out during the last year she had gotten a much better-paying job, was making much more money than she was last year, and she no longer qualified to file chapter 7 bankruptcy because of the "means test." In other words, she now makes too much money to file chapter 7 bankruptcy.

She will now either have to file a chapter 13 bankruptcy and pay all of her debt back over a five-year period of time (and it is a TON of debt), or she will possibly face lawsuits. Or I guess she can try to settle the debts, paying lump sums of money to her creditors, and still have bad credit. In other words, she has no good choices left.

If you decide you need to file bankruptcy please don't wait. Bad things can happen if you wait, such as with this lady. She can no longer file chapter 7 bankruptcy because she waited. If she had filed a year ago, her case would be over and she would be well on her way to re-establishing good credit again.

Even worse things can happen if you delay filing bankruptcy. You can be sued and have judgments taken against you. A judgment-creditor may garnish your bank account. You can lose property to repossession or foreclosure that you may not have lost had you filed bankruptcy sooner.

Or, possibly even worse, your creditors may "charge off" debt and issue 1099's for "cancellation of debt" income that you may have to pay income taxes on, that could have been avoided if you filed bankruptcy sooner (there is no cancellation of debt income if you file bankruptcy).

We often have clients tell us: "We wish we had filed bankruptcy sooner." Many people struggle for years paying on debts and putting up with bad credit and collection calls, and then have to file bankruptcy anyway.

So, if you have decided to take the bankruptcy step, please don't wait, don't procrastinate. Do it now and get it done and over with. If you live in the Houston, Texas area or surrounding area, give our office a call at 713-772-8037 to arrange your complimentary consultation to review your options.

Have you had an experience waiting to file bankruptcy? Was it a good idea or how did it turn out for you? Please leave your questions or comments below!

J Thomas Black
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Board Certified, Consumer Bankruptcy Law- Texas Board of Legal Specialization
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