According to Crixeo journalist, Ed Miles:
“While the Credit 9 mailer offers incredibly low rates, the licensing information on their site discloses that “typical” rates for most states they include in their disclosure are 18-24% APR.”
Bankruptcy might seem like the end of the world, which is why many people delay filing for bankruptcy even though they should have filed for one a long time back.
Is It Wise to Delay Bankruptcy?
A lot of people are under the impressions that they will do well if they delay bankruptcy. However, if you delay bankruptcy, you could be doing yourself far more harm than good. Filing bankruptcy too late might mean that you could end up losing more of your assets. Losing too many assets defeats the purpose of bankruptcy since its prime goal is to salvage as much assets as possible.
Hence, if you delay filing for bankruptcy for too long, it could end up costing you dearly. You should file for bankruptcy when you see the writing on the wall. Many experts are of the opinion that if your debts amount to 40% of your assets, then you should definitely file for bankruptcy.
Why People Delay Bankruptcy Even When it is Due
A lot of people delay filing for bankruptcy due to the stigma attached to it by society. Many fear that they will end up losing face in their family and community if they are declared bankrupt. But in these tough times, bankruptcy may not be that bad. Everyone knows that the coronavirus crisis has devastated the economy and adversely affected businesses of all sizes. Thus, if you are forced to file for bankruptcy due to the current crisis, it should not be a huge setback for your self-esteem. Remember, that bankruptcies rise during tough fiscal scenarios, and there will be many others besides you who are forced to take this route. Filing for bankruptcy may be unsavory, but you may have little choice under the current crisis. Nobody likes to admit defeat, but during these tough times it could be more prudent to file for bankruptcy to mitigate your losses.
A lot of folks who delay bankruptcy filing keep suffering silently for months and even years before they seek professional help. But by then it is rather late and they will likely lose more of their assets. The harrowing ordeal can even take a severe toll on their health and wellbeing. People who delay bankruptcy keep at it for months if not years during which they face hunger and a shortage of other basic necessities. people should know better than to suffer silently in this way. They should have the courage to concede that their startup of business is not working and that is high time that they file for bankruptcy.
Risks of Delaying Bankruptcy
What’s worse, during tough times, people resort to payday loans for paying daily expenses and rent. An annual interest rate of 400% is very moderate for payday loans. As most people would realize, such exorbitant interest rates are a debt trap. Payday lenders are glorified loan sharks. They are now banned in a few states and face restrictions in the rest. But now they are manipulating tribal laws to circumvent austere state laws against them.
Those who delay bankruptcy could face an increased risk of falling prey to these dubious financial schemes. Thus, if you are laden with debts, and are now thinking of taking out a payday loan, you know that it is time to throw in the towel. You should not delay bankruptcy any longer if payday loans appear attractive.
Here is a list of disadvantages you could face if you delay bankruptcy.
Higher Interest Expenses
You will have to pay much higher interest expenses if you delay bankruptcy. This high interest cost could eat into your assets. There is no point in paying off the minimum amount since your interest cost will keep accumulating.
More Asset Liquidation
You may end up selling more your assets to keep up with your debt payments and to keep your failing business afloat. You will ultimately have to file for bankruptcy once you are out of assets. But that is highly problematic since the main purpose of a bankruptcy is to save as many assets as possible. Filing for bankruptcy too late could mean that there is almost nothing left to save. So you will end up swallowing the bitter pill of bankruptcy without experiencing its benefits.
Another key purpose of bankruptcy is to give you a fresh start. But there may be no assets left for making a fresh start.
Creditors will become increasingly hostile and aggressive if you cannot keep up with payments. As your situation becomes dire, you could end up missing debt payments. This could raise the ire of your creditors and they may start placing unpleasant calls. They could even sell your debt to a debt collection agency. These agencies are notorious for pursuing debtors ruthlessly.
Bankruptcy could be your shield against aggressive and belligerent debt collection. If the court approves your request for bankruptcy, it will issue an order to restrain creditors and debt collectors from troubling you any further.
People avoid filing bankruptcy to save face. However, you could face greater embarrassment if creditors file lawsuits over irregular payments. If your financial situation deteriorates to a point where you cannot keep up with debt repayments, then it is time to file bankruptcy.
If you are thinking about selling off your assets to pay off pressing creditors then you must desist from the temptation of doing so. Liquidating assets is clear proof that you are headed towards financial ruin. A timely bankruptcy filing could make the difference in this case. If you start thinking about selling assets then you know that you cannot delay bankruptcy any further.
If your debts approach 40% of your assets, then experts agree bankruptcy should be on the cards. But before you file for bankruptcy, make sure that you talk to a reliable financial advisor. Check companies like Simple Path Financial for more options. Truthfully disclose your full financial situation so that you can get the best possible advice.
Instead of delaying bankruptcy, suffering in silence and compounding your losses, it is far better to get in touch with an expert to get past your financial imbroglio.