How Soon Should I File Bankruptcy After Not Paying Credit Cards?

It is important to plan prior to filing bankruptcy.

Filing Before Charge Off

Filing bankruptcy before a charge off of a credit card will mean that you will not have to endure months of collection calls and being placed with a collection agency that will send additional phone calls and letters demanding payment.

Creditors in Court

The sooner a bankruptcy filing, the more likely a creditor is to show up in a court hearing. Waiting until after the credit card has been charged off and placed with a collection agency will increase the likelihood that the debt will be discharged because the collector will most probably not appear in court.

Bottom Line

Planning for bankruptcy prior to filing is a wise choice regardless of how long you wait to do so. It's important to note that after four years most companies cannot actively try to collect on a debt, but the debt can continue to be reported for up to seven years, which can cause credit problems. Conversely, after a bankruptcy discharge, rebuilding of credit can be done in just a few years.

References

• Credit Info Center: Chapter 7 - Personal Bankruptcy FAQ
• Moran Law: Plan Before You File Bankruptcy
• MSN: Eight Steps to Take Before Bankruptcy