Should I Tell Creditors I'm Filing Bankruptcy?

It's a Nice Courtesy

You might consider telling your creditors that you are going bankrupt as a courtesy as long as you have already filed for bankruptcy, according to GreatBusinessLetters.com. However, it is not necessary, as your creditors will find out about the bankruptcy and your relationship with them will not change.

It Could Open You to a Lawsuit

If you have yet to file for bankruptcy, you should not tell anyone about an impending bankruptcy unless that person needs to know or it's someone you plan on dealing with in the future, such as family or a mortgage lender, according to Michigan Bankruptcy Law Firm. The creditor might try to sue you to avoid a bankruptcy discharge of debt before you file your bankruptcy case.

Bottom Line

Ultimately, it is up to you to inform creditors of your intention to file bankruptcy, but almost no benefits can come from it, according to debt expert Steve Rhode. If you do inform creditors of a bankruptcy, make sure they know to make all future contact with you through your legal representative.

References

• GreatBusinessLetters.com: Letter to Creditors Advising of Bankruptcy
• GetOutofDebt: Do I Tell My Creditors I Am Going Bankrupt?
• Michigan Bankruptcy Law: Do I Tell My Creditors I'm Filing Bankruptcy When They Call Me?